Diabetes mellitus is a serious chronic metabolic disorder. To develop novel anti-diabetic drugs from nature sources has always been the focus of research. Red deer (Cervus elaphu Linnaeus) antler is one of the most famous Chinese traditional medicines. We found that the peptides of 5-10 kDa from red deer antlers (PRDA) promoted the growth of cultured rat islet cells. The purpose of this study was to investigate the anti-diabetic actions of PRDA in vivo and purify a pure active peptide. We therefore investigated the hypoglycemic, hypolipidemic and antioxidant effects of PRDA in streptozotocin-induced diabetic mice and isolated a pure anti-diabetic peptide. PRDA, given intraperitoneally (75, 150, or 300 μg/kg), significantly decreased the blood glucose levels, significantly increased the insulin concentrations, and remarkably improved the lipid metabolism in the diabetic mice. PRDA significantly increased the superoxide dismutase activity, catalase activity and the total antioxidant capacity in the serum and liver, and simultaneously decreased the malondialdehyde levels. The activities of hexokinase and pyruvate kinase, two important enzymes involved in glucose utilization, were also significantly increased in the liver of the PRDA-treated diabetic mice. Moreover, a novel anti-diabetic peptide isolated from PRDA significantly promoted the viability of cultured rat insulinoma cells. The molecular mass of the purified peptide was 7064.8 Da under mass spectrometry, and its N-terminal amino acid sequence was identified as LSPFTTKTYFPHFDLSHGSA. Thus, PRDA may be useful in managing the hyperglycemia, hyperlipidemia, and oxidative stress in diabetes, and the anti-diabetic peptide is a promising drug for the treatment of diabetes.