Excessive glucocorticoid (GC) in type 2 diabetes mellitus (T2DM) reduces insulin sensitivity, impairs β-cell function, increases gluconeogenesis and glycogenolysis, impairs glucose uptake and metabolism, and reduces the insulinotropic effects of glucagon-like peptide 1. Melatonin, which serves as a physiological regulator of the hypothalamic-pituitary-adrenal (HPA) axis, has been suggested to have anti-diabetic effects. The objective of the present study was to investigate the effect of the MT1/MT2 melatonin agonist Neu-P11 on glucose and lipid metabolism in T2DM rats induced by a high fat diet combined with low doses of streptozotocin. T2DM rats were intragastrically administered melatonin (20 mg/kg), Neu-P11 (20, 10, 5 mg/kg), or a vehicle for 4 weeks. The results showed that the increased food intake, water consumption, hyperglycemia, glucose intolerance, and insulin resistance in T2DM rats were all improved by Neu-P11 treatment. Neu-P11 increased GC receptor expression and suppressed 11β-hydroxysteroid dehydrogenase 1 activity in the hippocampus by enhancing GC sensitivity and HPA feedback, thus decreasing the high GC levels. Transcript levels of the glucose metabolism-related genes peroxisome proliferator-activated receptor-γ, glucose transporter type-4, and adiponectin in adipose tissue were significantly increased after Neu-P11 treatment, while leptin mRNA was significantly decreased. Furthermore, MT1 and MT2 protein levels were enhanced by Neu-P11. These data suggest that normalization of the hyperactivated HPA axis by melatonin and Neu-P11 in T2DM regulates metabolic profiles and insulin sensitivity, which may attenuate insulin resistance and glucose homeostasis. Because Neu-P11 has superior pharmacokinetics and a longer half-life than melatonin, it might be beneficial in treating obesity and T2DM.