With the aim of characterizing the active ingredients lupenone and β-sitosterol in Rhizoma Musae samples a reversed-phase HPLC method for the separation of these two compounds in Rhizoma Musae samples was developed (regression coefficient > 0.9996). The method was further applied to quantify lupenone and β-sitosterol content in Rhizoma Musae samples cultured in different growth environments. Different variables such as geographical location, growth stage, and harvest time, demonstrated differential effects on lupenone and β-sitosterol levels. Moreover, we determined the optimum conditions for cultivation and harvesting of Rhizoma Musae herbs. Lupenone administration caused a significant reduction in fasting blood glucose (FBG) levels in diabetic rats at doses of 1.78, 5.33, and 16.00 mg·kg for 14 days, the glycated hemoglobin (HbA1c) levels of diabetic rats also significantly reduced at doses of 5.33, and 16.00 mg·kg, indicating a robust antidiabetic activity. To our knowledge, this is the first report of an optimized HPLC method successfully applied to quantify lupenone and β-sitosterol, and its applicability in optimizing Rhizoma Musae growth. Animal experiments also showed for the first time that lupenone from Rhizoma Musae has anti-diabetic activity.