The present study was carried out to determine the effect of berberine on glucose homeostasis and several biomarkers associated with insulin sensitivity in male Wistar rats with intraperitoneal injection of streptozotocin (STZ)-induced diabetes. Rats with fasting blood glucose 16.7 mmol/L after 2 weeks of STZ injection were divided into two groups. One group was used as the diabetic control and another treated by gavage feeding with 100 mg/kg/d of berberine in water containing 0.5% carboxymethyl cellulose. A group of rats without receiving STZ was used as the normal control. After 7 weeks, berberine supplementation moderately but significantly lowered fasting blood glucose levels and improved oral glucose tolerance. Berberine lowered plasma free fatty acids and C-reactive protein levels without affecting plasma insulin levels. Diabetic rats treated with berberine showed significantly lower plasma triacylglycerol and cholesterol levels. Furthermore, berberine inhibited dipeptidyl peptidase-4 and protein tyrosine phosphatase-1B activities. In conclusion, berberine showed a dramatic effect of lowering blood cholesterol and triacylglycerols and improved moderately glucose homeostasis in STZ-induced diabetic rats in association with multiple factors related to insulin resistance.