Lespedezahas been used for the management of diabetes in folklore medicine. The purpose of this study is to investigate the protective effects of the methanol extract ofLespedeza davurica(LD) on cytokine-inducedβ-cell damage and streptozotocin- (STZ-) induced diabetes. RINm5F cells were treated with interleukin- (IL-) 1βand interferon- (IFN-)γto induce pancreaticβ-cell damage. The exposure of LD extract significantly decreased cell death, nitric oxide (NO) production, nitric oxide synthase (iNOS) expression, and nucleus factor-kappa B (NF-κB) p65 activation. Antidiabetic effects of LD extract were observed by oral glucose tolerance test (OGTT) in normal rats and by checking the biochemical, physiological, and histopathological parameters in STZ-induced diabetic rats. In OGTT, glucose clearance levels improved by oral treatment of LD extract. The water intake, urine volume, blood glucose, and serum TG, TC, TBARS, and DPP-IV levels were significantly decreased, and liver glycogen content was significantly increased by treatment of LD extract (250 mg/kg BW) in STZ-induced diabetic rats. Also, insulin immunoreactivity of the pancreases was increased in LD extract administrated rats compared with diabetic control rats. These results indicate that LD extract may protect pancreaticβ-cell damage and regulate the blood glucose in STZ-induced diabetic rats.