Our previous study demonstrated that long-term cola consumption reduced body weight and improved insulin sensitivity in healthy male rats. In this study, we investigated the effect and mechanism of caffeine and sucrose, major components of cola, on glucose metabolism in 90% pancreatectomized diabetic rats. After a 12-week administration of 0.01% caffeine solution, the rats exhibited reduced body weight, fats, and insulin resistance, without a change in food intake, regardless of an 11% sucrose solution supplementation. In addition, caffeine enhanced glucose-stimulated first- and second-phase insulin secretion and beta-cell hyperplasia. This insulinotropic action was explained by potentiating an insulin/insulin-like growth factor 1 (IGF-1) signaling cascade via induction of insulin receptor substrate 2 in islets. In contrast, sucrose supplementation deteriorated insulin sensitivity and attenuated insulin/IGF-1 signaling in islets, which reduced the number of beta cells. Caffeine nullified the adverse effect of sucrose on glucose homeostasis. These findings indicate that long-term caffeine consumption can help alleviate diabetic symptoms by enhancing insulin sensitivity and beta-cell function through improved insulin/IGF-1 signaling via induction of insulin receptor substrate 2 in mildly diabetic rats.