Astragalus membranaceus polysaccharides (AMP) was reported to exhibit hypoglycemic potential in diabetic host. However, the metabolic fate of AMP in gastrointestinal tract and its underlying hypoglycemic mechanisms remained unclear. Our current study aimed to reveal the structure alteration of AMP in gastrointestinal tract and its hypoglycemic mechanism from the perspective of microbial transformation. Caco-2 monolayer cell model revealed that AMP exhibited poor intestinal absorption. The in-vitro digestion and fermentation study revealed that AMP remained intact after gastrointestinal digestion while it could be degraded and utilized by gut microbiota with increased SCFA formation and decreased levels of all the monosaccharides in AMP except for mannose. Additionally, Diversity of gut microbiota was improved with the increased abundance of Dubosiella and Monoglobus and decreased abundance of Escherichia-Shigella and Acinetobacter after fermentation of AMP. Further hypoglycemic mechanism study for the first time revealed that both AMP and its potential microbial metabolites, SCFA salt mixture, could enhance intestinal integrity significantly on LPS induced Caco-2 cell model, while only SCFA salt mixture rather than AMP could significantly stimulate GLP-1 secretion in NCI-H716 cell model possibly via promoting GPCR43 expression. Such findings provided insights into the hypoglycemic mechanism of AMP from the perspective of microbial transformation.