Although genetic predisposition influences the onset and progression of insulin resistance and diabetes, dietary nutrients are critical. In general, protein is beneficial relative to carbohydrate and fat but dependent on protein source. Our recent study demonstrated that 70% replacement of dietary casein protein with the equivalent quantity of protein derived from herring milt protein hydrolysate (HMPH; herring milt with proteins being enzymatically hydrolyzed) significantly improved insulin resistance and glucose homeostasis in high-fat diet-induced obese mice. As production of protein hydrolysate increases the cost of the product, it is important to determine whether a simply dried and ground herring milt product possesses similar benefits. Therefore, the current study was conducted to investigate the effect of herring milt dry powder (HMDP) on glucose control and the associated metabolic phenotypes and further to compare its efficacy with HMPH. Male C57BL/6J mice on a high-fat diet for 7 weeks were randomized based on body weight and blood glucose into three groups. One group continued on the high-fat diet and was used as the insulin-resistant/diabetic control and the other two groups were given the high-fat diet modified to have 70% of casein protein being replaced with the same amount of protein from HMDP or HMPH. A group of mice on a low-fat diet all the time was used as the normal control. The results demonstrated that mice on the high-fat diet increased weight gain and showed higher blood concentrations of glucose, insulin, and leptin, as well as impaired glucose tolerance and pancreatic β-cell function relative to those on the normal control diet. In comparison with the high-fat diet, the replacement of 70% dietary casein protein with the same amount of HMDP or HMPH protein decreased weight gain and significantly improved the aforementioned biomarkers, insulin sensitivity or resistance, and β-cell function. The HMDP and HMPH showed similar effects on every parameter except blood lipids where HMDP decreased total cholesterol and non-HDL-cholesterol levels while the effect of HMPH was not significant. The results demonstrate that substituting 70% of dietary casein protein with the equivalent amount of HMDP or HMPH protein protects against obesity and diabetes, and HMDP is also beneficial to cholesterol homeostasis.