Background: The protective effects of the crude polysaccharide extract Polysaccharide Lycium chinense (PLC) from the leaves of Lycium chinense (Chinese wolfberry) were evaluated in streptozotocin (STZ)-induced diabetic rats. Materials and Methods: Diabetes was induced in rats by administering STZ (60 mg/kg, i.p), and diabetic rats were orally treated with 100 or 400 mg/kg of PLC extract for 4 weeks. Results: Diabetic rats showed high fasting blood glucose levels, altered serum lipid profile; triglycerides, total cholesterol, low-density lipoprotein cholesterol, high-density lipoprotein cholesterol, and liver function enzymes; and alanine aminotransferase, aspartate aminotransferase, and alkaline phosphatase. In addition, oxidative stress and pro-inflammatory cytokines were elevated in the kidney and liver tissues of diabetic rats. After treatment with PLC, it was observed that hyperglycemia, hyperlipidemia, and liver and kidney functions were restored to almost normal while enzymatic antioxidant levels of glutathione peroxidase, superoxide dismutase, and catalase were significantly increased, in addition to remarkable reduction in malondialdehyde and pro-inflammatory cytokines. Conclusion: These results demonstrated the protective effect of PLC may be mediated by its antioxidant and anti-inflammatory effects and may be employed as a therapy for preventing diabetes and its complications.