Vaccinium arctostaphylos has traditionally been employed in Iranian folk medicine to treat diabetes. However, the precise molecular mechanisms underlying its antidiabetic properties remain incompletely understood. The current experiment intended to explore the modulatory effects of V. arctostaphylos fruit ethanolic extract (VAE) on biochemical and molecular events in the livers of diabetic rats. In this experimental study, male Wistar rats were randomly assigned to four groups: normal control, normal rats with VAE treatment, diabetic control, and diabetic rats with VAE treatment. Following 42 days of treatment, the impact of VAE on diabetes-induced rats was assessed by measuring various serum biochemical parameters, including insulin, free fatty acids (FFA), tumor necrosis factor-α (TNF-α), reactive oxygen species (ROS), and adiponectin levels. The activities of hepatic carbohydrate metabolic enzymes and glycogen content were determined. Additionally, expression levels of selected genes implicated in carbohydrate/lipid metabolism and miR-27b expression were evaluated. H and E-stained liver sections were prepared for light microscopy examination. Treatment with VAE elevated levels of insulin and adiponectin that reduced levels of FFA, ROS, and TNF-α in the serum of diabetic rats. VAE-treated rats exhibited increased activities of hepatic glucokinase (GK), glucose-6-phosphate dehydrogenase (G6PD), and glycogen concentrations, in conjunction with decreased activities of glucose-6-phosphatase (G6Pase) and fructose-1,6-bisphosphatase (FBPase). Furthermore, VAE significantly upregulated the transcription levels of hepatic insulin receptor substrate 1 (Irs1) and glucose transporter 2 (Glut2), while considerably downregulated the expression of peroxisome proliferator-activated receptor gamma (Pparg) and sterol regulatory element-binding protein 1c (Srebp1c). VAE remarkably enhanced the expression of miR27-b in the hepatic tissues of diabetic rats. Abnormal histological signs were dramatically normalized in diabetic rats receiving VAE compared to those in the diabetic control group. Our findings underscore the hypoglycemic and hypolipidemic activities of V. arctostaphylos and assist in better comprehension of its antidiabetic properties.