Aryl-hydrocarbon receptor (Ahr) plays an important role in the regulation of intestinal homeostasis.Diabetes is characterized by vascular complications and intestinal dysfunction. We aimed at understanding the relationship between intestinal defense impairment and inflammation in diabetes and effects of Ahr ligands on diabetes-induced insulin resistance, endovascular inflammation, and intercellular adhesion molecule (ICAM) and flavin mono-oxygenase (FMO3) expression. Effects of Ahr ligands, such as tryptophan (Trp) and indole-3-carbinol (I3C) on intestinal barrier and inflammation of Ins2Akita mice were examined. Myeloid differentiation primary response 88 (MYD88) is the adaptor for inflammatory signaling pathways. Ins2Akita-MyD88-/- mice were used to study the role of MyD88. Ins2Akita mice demonstrated decreased Ahr and regenerating islet-derived 3-β (Reg3β) expression, and increased Klebsiella pneumoniae translocation. Ins2Akita mice demonstrated increased inducible nitric oxide synthase (iNOS) expression of intestine; ICAM, iNOS, interleukin 1 beta (IL-1β), and FMO3 expression of liver; and ICAM, iNOS, and FMO3 expression in aorta. Trp and I3C decreased diabetes-induced translocation and increased Ahr and Reg3β expression of intestine. Ahr ligands reduced diabetes-induced ICAM and FMO3 expression in liver and aorta; IL-6, tumor necrosis factor alpha (TNF-α), and iNOS expression in Kupffer cells; plasma IL-6 and TNF-α levels; dipeptidyl peptidase (DPP4) activity; and insulin insensitivity. Ins2Akita-MyD88-/- mice demonstrated decreased expression of p-NF-κB of liver and ICAM of aorta compared with Ins2Akita mice. Altogether, our data suggest that diabetes induces ICAM and FMO3 expression through the decrease in intestinal defense and MyD88. Ahr ligands reverse diabetes-induced intestinal defense impairment, insulin insensitivity, FMO3/ICAM expression, and systemic inflammation.