Phellinus linteus is a medicinal mushroom that has been used in Oriental countries for centuries for its antitumor, antioxidant, immunomodulatory, and biological activity on hyperglycemia. A water-soluble crude polysaccharide was extracted using hot water from P. linteus mycelia grown under submerged culture. An orthogonal experiment was used to optimize the extraction conditions of P. linteus mycelia polysaccharides (PLP). The crude polysaccharide was purified using DEAE Sephadex A-50 and Sephadex G-200 chromatography. Fourier transform infrared (FT-IR) spectroscopy and nuclear magnetic resonance ((1) H NMR) spectroscopy were used to investigate the structure of the purified P. linteus polysaccharide (PLP-I), revealing that it was mainly a branched-type glycan with both α- and β-linkages and a pyranoid sugar ring conformation. PLP orally administered at 100 mg/kg body weight/d could significantly reduce the blood glucose level by 35.60% in alloxan-induced diabetic mice. The results of an oral glucose tolerance test (OGTT) revealed that PLP had an effect on glucose disposal after 28 d of treatment. The result revealed that PLP from a submerged culture of P. linteus mycelia possessed potent hypoglycemic properties. The polysaccharide may be useful as a functional food additive and a hypoglycemic agent.