In previous study, the anti-diabetic effect of Cinnamomi Cassiae extract (Cinnamon bark: Lauraceae) in a type II diabetic animal model (C57BIKsj db/db) has been reported. To explore their mechanism of action, in present study, the effect of cinnamon extract on anti-hyperglycemia and anti-hyperlipidemia was evaluated by measuring the blood glucose levels, serum insulin, and adiponectin levels, serum and hepatic lipids, PPAR${alpha}$ mRNA expression in liver and PPAR${gamma}$ mRNA expression in adipose tissue, respectively. Male C57BIKs db/db mice were divided into a diabetic group and cinnamon extract treated group and examined for a period of 12 weeks (200 mg/kg, p.o). The fasting blood glucose and postprandial 2 h blood glucose levels in the cinnamon treated group were significantly lower than those in the control group (p < 0.01), whereas the serum insulin and adiponectin levels were significantly higher in the cinnamon treated group than in the control group (p < 0.05). The serum lipids and hepatic lipids were improved in the cinnamon administered group. Also the ${alpha}$ mRNA (liver) and PPAR${gamma}$ mRNA (adipose tissue) expression levels were increased significantly in the cinnamon treated group (p < 0.05). Our results suggest that cinnamon extract significantly increases insulin sensitivity, reduces serum, and hepatic lipids, and improves hyperglycemia and hyperlipidemia possibly by regulating the PPAR-medicated glucose and lipid metabolism.