Protein tyrosine phosphatase 1 B (PTP1B) is one of main causes involved in type 2 diabetes, it dephosphorylates insulin receptor substrate (IRS) and dysregulates insulin signaling pathway, thus inducing insulin resistance. Our previous work first reported that FYGL, a neutral hyperbranched proteoglycan ingredient extracted from Ganoderma lucidum, has hypoglycemic activity in vivo and inhibitory potency on PTP1B in vitro, but the underlying mechanism was still unclear. In this study, we sought to investigate effects of FYGL on insulin signaling pathway involved with PTP1B as the targeting point in hepatocytes. We found that FYGL inhibited overexpression of PTP1B in liver tissues of ob/ob mice and HepG2 cells, significantly improved the phosphorylation of IRS1 on tyrosine residues, activated phosphatidylinositol-3 kinase (PI3K)/protein kinase B (Akt) cascades and increased phosphorylation of glycogen synthesis kinase-3β (GSK3β), finally enhanced insulin-stimulated glycogen synthesis in HepG2 cells and decreased blood glucose in insulin resistance model mice. Our study clearly illustrated the hypoglycemic mechanism of a novel proteoglycan possibly used in type 2 diabetes management in vivo.