The incidence of type 2 diabetes is increasing rapidly worldwide, and the development of novel anti-diabetic drugs is emerging. However, most anti-diabetic drugs cannot be used in patients with hepatic dysfunction, renal disease, and heart disease, which makes pharmacological therapy of type 2 diabetes complicated. Despite continued introduction of novel agents, the search for an ideal drug that is useful as both a hypoglycemic agent and to reduce diabetes-related complications remains elusive. Berberine is an isoquinoline alkaloid extract that has shown promise as a hypoglycemic agent in the management of diabetes in animal and human studies. Mechanistic studies have revealed beneficial effects of berberine on diabetes-related complications. Although there have been few clinical reports of the anti-diabetic effects of berberine, little documentation of adverse effects in humans positions it as a potential candidate drug to treat type 2 diabetes. In the present review, the anti-diabetic mechanism of berberine, its effect on diabetes-related complications, and its recent use in human clinical studies is highlighted. In addition, we summarize the different treatments for type 2 diabetes in adults and children.