Chronic diabetes mellitus finally leads to serious vascular dysfunction. Diosgenin is a natural steroidal saponin with potential cardiovascular protective effect. In this study, the protective effect of diosgenin was checked on the aorta from streptozotocin-induced diabetic rats. Diabetic rats received diosgenin (40 mg·kg−1·d−1) for 7 weeks starting 1 week after intraperitoneal injection of streptozotocin (60 mg/kg). Aortic reactivity of endothelium-intact and -denuded rings to potassium chloride, phenylephrine, acetylcholine, and isosorbide dinitrate were measured and some involved mechanisms were explored. The results showed that diosgenin has a hypoglycemic effect and attenuates maximum contractile response of endothelium-intact and -denuded rings to PE. In addition, endothelium-dependent relaxation to acetylcholine was greater in diosgenin-treated diabetics with no significant change for endothelium-independent relaxation to isosorbide dinitrate and addition of N(G)-nitro-L-arginine methyl ester, as a nitric oxide synthase inhibitor eliminated this beneficial effect. Furthermore, diosgenin significantly attenuated aortic DNA fragmentation as an index of apoptosis and malondialdehyde content, lowered the aortic expression of angiotensin converting enzyme and transcription factor nuclear factor-κB and raised expression of endothelial nitric oxide synthase with no significant effect on the activity of superoxide dismutase. Taken together, our study provides insight into the mechanisms underlying the beneficial effect of diosgenin as a potential therapeutic agent to mitigate vascular dysfunction in diabetes mellitus.