Due to the limitations of existing anti-diabetic drugs, the treatment of diabetes mellitus remains a significant challenge. The present study aimed to investigate the hypoglycemic, hypolipidemic and antioxidant effects of Paecilomyces tenuipes N45 extracts on alloxan-induced type I diabetes mellitus in mice. Diabetic Kunming mice were orally administered with water extract (WE) at doses of 2.50, 0.25 and 0.05 g/kg) or alcohol extract (AE) at doses of 2.00, 0.20 and 0.04 g/kg, for 3 weeks, following which the levels of factors associated with blood glucose, lipids and free radicals were determined. The anti-diabetic activities of AE and WE were further confirmed via an oral glucose tolerance test. Similar to the effects of metformin, Paecilomyces tenuipes N45 extracts led to a significant reduction in blood glucose levels, increase in serum insulin concentration and normalization in the densities of low-density lipoprotein cholesterol and high density lipoprotein cholesterol. The Paecilomyces tenuipes N45 extracts exerted antioxidative effects, indicated by regulation in the levels of superoxide dismutase, malondialdehyde and glutathione peroxidase. Taken together, the results of the present study demonstrated that Paecilomyces tenuipes N45 extract, a safe pharmaceutical agent, exerted anti-diabetic and anti-nephropathic activities and, thus, offers potential as a novel therapeutic agent in the treatment of diabetes.