This study is designed to investigate the effect of artemether on type 2 diabetic db/db mice. The experiments consisted of three groups: normal control (NC, db/+, 1% methylcellulose, intragastric administration), diabetic control (DM, db/db, 1% methylcellulose, intragastric administration), and artemether treated (artemether, db/db, 200 mg/kg of artemether, intragastric administration). The treatment lasted for two weeks. The food intake, body weight, and fasting blood glucose of mice were measured every three days. At the start and end of the experiment, the intraperitoneal glucose tolerance test (IPGTT) and insulin tolerance test (IPITT) were performed. We determined the serum insulin and glucagon levels by ELISA kits and calculated insulin resistance index (HOME-IR). HE staining was used to observe the morphologies of pancreas and liver in mice. The damage of pancreatic beta cells was evaluated by TUNEL staining and immunofluorescence. We found the following: (1) compared with the DM group, the food intake and weight increase rate of artemether group significantly reduced (P < 0.05); (2) compared with pretreatment, artemether significantly reduced the fasting blood glucose levels, and the areas under the curves (AUCs) of IPGTT were decreased significantly, increasing the tolerance to glucose of db/db mice. (P < 0.05); (3) artemether improved hyperinsulinemia and decreased the AUCs of IPITT and HOME-IR, increasing the insulin sensitivity of db/db mice. (4) Artemether significantly ameliorated islet vacuolar degeneration and hepatic steatosis in db/db mice. (5) Artemether reduced the apoptosis of pancreatic beta cells and increased insulin secretion in db/db mice compared with DM group (P < 0.05). Our results indicated that artemether significantly improved glucose homeostasis and insulin resistance and had the potential activity to prevent obesity, reduced the severity of fatty liver, and protected pancreatic beta cells, promising to treat type 2 diabetes.