Here we evaluate the effects of ethanol and aqueous extracts fromCortex Lycii Radicis(CLR) on insulin resistance and lipid metabolism in obese-diabetic rats, which were induced by high fat feeding for 3 weeks after injection with streptozotocin (STZ). Diabetic rats treated with ethanol or aqueous extracts of CLR at 15 and 30 g/kg dosage for 7 weeks, had decreased body weights, concentration of serum glucose, triglyceride (TG), total cholesterol (TC), and low-density lipoprotein-cholesterol (LDL-C), alanine aminotransferase (ALT) and aspartate aminotransferase (AST), while the insulin-sensitivity index (ISI) improved significantly compared with the control group. In addition, high contents of tumor necrosis factor-α(TNF-α), interleukin-6 (IL-6) and low adiponectin level were observed in the control group and levels of TNF-αand IL-6 in CLR groups showed obvious differences with the control group. Histopathologic examination also showed degrees of hepatocyte edema although hepatocyte ballooning degeneration was lessened in all CLR groups. Overall, ethanol extract from CLR seemed to be more effective than aqueous extracts in improving insulin resistance, resulted in elevating insulin sensitivity, adjusting glucose and lipid metabolism, correcting cytokines levels and ameliorating liver function, especially protecting the liver against lipoid degeneration. Copyright © 2008 John Wiley & Sons, Ltd.