Objectives: This study investigates the anti-diabetic effects of <i>Cordyceps militaris</i> extract on diabetic model mice (db/db mouse).Methods: Diabetic mice (db/db) were compared to normal control group (NC). The positive control group received Metformin (Met), while other groups received <i>Cordyceps militaris</i> extract, including <i>ARA301_L</i>. Body weight, fasting blood glucose levels (FBGL), oral glucose tolerance tests (OGTT), insulin tolerance tests (ITT), blood lipid profiles, and tissue analysis were conducted.Results: Diabetic mice showed significantly higher body weight compared to normal mice. The positive control group maintained stable weight over 56 days, while the <i>Cordyceps militaris</i> extract groups showed slight weight decreases, with a marked reduction in the <i>ARA301_L</i> group. FBGLs were significantly lower in treated groups than in control groups. OGTT indicated better glucose regulation in treated groups, though differences among them were not significant. ITT showed lower blood glucose levels in treated groups, indicating improved insulin resistance. Blood lipid profiles revealed significant reductions in total cholesterol (TC) and AST in the <i>ARA301_L</i> group. Liver tissue analysis showed decreased expression of lipid metabolism and inflammation-related genes, particularly PPAR<i>γ</i> and SREBP-1c. Muscle and adipose tissues displayed increased GLUT4 protein and reduced inflammatory gene expression.Conclusions: <i>Cordyceps militaris</i> extract has more positive effects than metformin on body weight, insulin resistance, sugar metabolism, fatty liver, and inflammation in diabetic mice. It also has a similar positive effect as metformin on blood lipid concentration and liver damage. This suggests the potential of diabetes management in <i>Cordyceps militaris</i> extract.