Objectives : This study aimed to evaluate the effect of Atractylodis Rhizoma Alba water extract on streptozotocin (STZ)-induced diabetes in rats. Methods : Male Sprague-Dawley rats were divided into four groups ; normal, STZ-control and Atractylodis Rhizoma Alba (A) water extract-administrated group. Rats in which diabetic was induced by intraperitonal injection with STZ(60 mg/kg body weight). STZ-induced diabetic rats were orally administrated A extract daily for 5 weeks at doses of 200 or 500 mg/kg. Fasting blood glucose, total cholesterol, triglyceride and blood urea nitrogen were measured in sera of rats. Total volume of urine and urinary creatinine were also measured. Histopathological examination and immunohistochemical staining for the expression of insulin and ${alpha}$-SMA in pancreas and kidney were performed, respectively. Results : There were no differences in body and kidney weights between STZ-control and A extract-administrated groups. However, serum triglyceride level was significantly decreased in A extract-administrated groups compared with those of STZ-control group. Histopathological analysis of pancreas and kidney revealed increased the number of islets and insulin-positive beta-cells in pancreas, and decreased morphological changes of glomerulus and ${alpha}$-SMA expression in kidney after the administration of A extract. Conclusions : These results suggest that Atractylodis Rhizoma Alba has a biological action on STZ-induced diabetes in rats via decreasing the serum levels of total triglyceride, and suppressing the morphological changes of pancreas and kidney.