BACKGROUND Fufang-zhenzhu-tiaozhi formula (FTZ) is a patented preparation of traditional Chinese medicine that has been used to treat hyperglycemia and hyperlipidemia in the clinic for almost 10 years. Our previous study had demonstrated that FTZ can protect islet β cell injury in vitro. However, the efficacy of FTZ on β cell regeneration in vivo and the involved anti-diabetic mechanism remains unknown. OBJECTIVE We aim to investigate the effects of FTZ as a good remedy for islet protection and β cell regeneration, and to reveal the underlying mechanism. METHODS C57BL/6 mice were fed with high-fat diet for 3 weeks and then intraperitoneally injected with streptozotocin (90 mg/kg/d × 1 d) to establish type 2 diabetes (T2D) models. Mice in each group were divided into three batches that sacrificed after 3, 7 and 28 days of FTZ administration. Body weight, blood glucose, and oral glucose tolerance test were measured at indicated time points. Fasting insulin was determined by enzyme-linked immunosorbent assay (ELISA) kit. Neonatal β cell was assessed by insulin & PCNA double immunofluorescence staining, and the underlying mechanisms related to β cell regeneration were further performed by hematoxylin-eosin staining, insulin & glucagon double immunofluorescence staining and Western blot. RESULTS FTZ and metformin can significantly help with the symptoms of DM, such as alleviating weight loss, reducing blood glucose, improving the level of insulin in vivo, and relieving insulin resistance, suggesting FTZ and metformin treatment maintained the normal morphological function of islet. Notably, β cell regeneration, which is indicated by insulin and PCNA double-positive cells, was promoted by FTZ, whereas few neonatal β cells were observed in metformin group. Hematoxylin-eosin staining, and its quantification results showed that FTZ effectively prevented the invasion of inflammatory cells into the islets in diabetic mice. Most β cells in the islets of diabetic model mice were devoid, and the islets were almost all α cells, while the diabetic mice administered FTZ could still maintain about half of the β cells in the islet. Furthermore, FTZ upregulated the expression of critical transcription factors during β cell development and maturation (such as PDX-1, MAFA and NGN3) in diabetic mice. CONCLUSIONS FTZ can alleviate diabetes symptoms and promote β cell regeneration in diabetic mice. Moreover, FTZ promotes β cell regeneration by preserving islet (resisting inflammatory cells invading islets), maintaining the number of β cells in islets, and increasing the expression of PDX-1, MAFA and NGN3.