Lactoferrin (Lf) is an iron-binding glycoprotein with potentially beneficial biological functions. However, the interaction between Lf and type 2 diabetes mellitus (T2DM) remains unclear. We hypothesized that Lf would improve hepatic insulin resistance and pancreatic dysfunction in diabetic mice. Male C57BL/6J mice were fed a high-fat diet for 15 weeks and injected with streptozotocin (STZ) for 5 consecutive days to establish a T2DM model. One week after STZ injection, mice with ≥11.1 mmol/L fasting blood glucose concentration were considered T2DM mice. These mice received 0.5% or 2% Lf solution for another 12 weeks. Biochemical parameters were measured, and histopathological examination of the pancreas and liver was performed. Hepatic protein expression related to the insulin signalling pathway was also assessed. Diabetic mice showed insulin resistance and abnormal glucolipid metabolism. Lf decreased serum concentrations of glycated serum protein, fasting insulin, cholesterol, and triglyceride and increased liver insulin sensitivity. Hematoxylin-eosin staining showed that Lf reversed the abnormal pancreatic islets of diabetic mice. Lf improved pancreatic dysfunction by reducing oxidative stress and inflammation responses. Furthermore, Lf upregulated the protein expression of insulin receptor, insulin receptor substrate-1, glucose transporter 4, phosphor phosphatidylinositol 3-kinase/phosphatidylinositol 3-kinase (PI3K), and phosphor protein kinase B/protein kinase B (AKT) in the liver. This study indicated that Lf supplementation improved hepatic insulin resistance and pancreatic dysfunction, possibly by regulating the PI3K/AKT signaling pathway in T2DM mice.