Abstract: To investigate the effects of small molecule compound bicyclol on type 2 diabetes mellitus (T2DM) and its mechanism of action, KKAy mice were treated with various doses of bicyclol (100, 200, and 400 mg·kg^-1·d^-1) with metformin (200 mg·kg^-1·d^-1) as a positive control, respectively. Age-matched C57BL/6J mice were used as the non-diabetic control (Con). The effect on hyperglycemia was evaluated by the levels of no-fasting blood glucose, fasting blood glucose (FPG), and glucose tolerance. Whole body insulin sensitivity was evaluated by fasting plasma insulin (FPI) and homeostasis model assessment-insulin resistance (HOMA-IR). The hepatic response to insulin was evaluated by insulin-induced activation of insulin signaling pathway. Western blot was performed to detect hepatic protein expressions. All animal experimental procedures were approved by the Animal Ethics Committee of Chinese Academy of Medical Sciences. KKAy mice showed T2DM characteristics such as hyperglycemia and insulin resistance, including attenuated response to insulin in the liver. A 28-day treatment of bicyclol suppressed both FPG and no-fasting blood glucose, in a dose-and time-dependent manner. Moreover, FPI and HOMA-IR values were both significantly decreased, and hepatic insulin-induced-phosphorylation of IRβ and Akt were up-regulated in KKAy mice after bicyclol treatment. Phosphorylation of FoxO1, the key transcription factor for regulating gluconeogenesis, was also significantly elevated by bicyclol treatment. These results suggested that bicyclol has some therapeutic effects on hyperglycemia in a time-and dose-dependent manner in KKAy mice. Its mechanism might be attributed to improving insulin resistance, enhancing hepatic insulin signaling pathway, and inhibiting gluconeogenesis. No significant interference on the hypoglycemic effect of metformin by bicyclol was observed in this study.