The aim of the study was to investigate the effects of baicalin on blood glucose, insulin and cytokine levels. Rat diabetes was induced by intraperitoneal (i.p.) injection of nicotinamide and streptozotocin. Diabetic rats were dosed with i.p. baicalin or oral metformin daily for 8 days. Blood glucose, insulin and hepatic glycogen were determined using conventional methods. The activity of hepatic hexokinase was determined using a coupled assay with glucose-6-phosphate dehydrogenase. Serum levels of interleukin-6 (IL-6), tumor necrosis factor-α (TNF-α) and adiponectin were measured by enzyme-linked immunosorbent assay. Administration of baicalin at 50 or 100 mg/kg significantly decreased plasma glucose levels in a dose dependent manner. The serum insulin level was not increased by baicalin treatment. Administration of baicalin at a high dose (100 mg/kg) resulted in a significant increase of liver glycogen content and a reduction of serum TNF-α. The activity of hepatic hexokinase was significantly increased after dosing baicalin at 25, 50 or 10 mg/kg. Administration of baicalin (50 or 10 mg/kg) or metformin (10 mg/kg) significantly alleviated the morphological injury to the pancreas caused by STZ. The possible mechanisms contributing to the hypoglycemic effect include increasing the hepatic glycogen content and glycolysis, and reducing the serum levels of TNF-α.