Background: Emodin can ameliorate insulin resistance in diabetes mellitus (DM), but the molecular mechanisms are still uncertain. Objective: The objective of this study is to identify the potential molecular mechanisms of emodin-mediated type 2 DM treatment. Methods: We treated the type 2 diabetic KKAy mice with emodin in different doses. Biochemistry data were collected, and the expression of peroxisome proliferator activated receptor γ (PPARγ) and Glucose transporter (GLUT)-2/4 were examined in liver, muscle, and adipose tissues using immunohistochemistry and reverse transcriptase polymerase chain reaction. The expression of IRS-1, PI3K, pAkt-ser473, and FoxO1 were also tested in these tissues. Results: Our data demonstrated that the levels of cholesterol, higher fasting plasma glucose, total cholesterol, total triacylglycerol, low-density lipoprotein cholesterol, free fatty acid, C creative protein, and tumor necrosis factor-α (P < 0.05), lower high-density lipoprotein, and insulin sensitivity index (P < 0.05) were ameliorated by emodin in a dose-dependent manner (P < 0.05). In addition, emodin was also identified to improve insulin sensitivity in KKAy diabetic mice (P < 0.05). In DM, the expression of PPARγ and GLUT-2 was down-regulated in liver (P < 0.05) as well as in muscle and adipose tissues (P < 0.05) when compared with the controls. However, the decreased levels were subject to emodin treatment in a dose-dependent manner. Meantime, emodin was identified to up-regulate the expression of IRS-1, PI3K, Akt-ser473 (P < 0.05), while FoxO1 (P < 0.05) was down-regulated. Conclusion: These results suggest that emodin represents a promising target to improve insulin sensitivity by enhancing liver glucose utilization, glucose uptake of muscle, and fat through IRS/PI3K/Akt/FoxO1 pathway.