The aim of this study is to determine the protective effect of a liquid rice hull smoke extract (RHSE) against type 2 diabetes (T2D) in mice induced by a high-fat diet. As compared to the control group of mice on a high-fat diet (HFD), feeding the HFD supplemented with 0.5% or 1% RHSE for 7 weeks resulted in significantly reduced blood glucose and triglyceride and cholesterol concentrations, higher serum insulin levels, and improved glucose tolerance, as assessed by an oral glucose tolerance assay. The hypoglycemic effect of RHSE was accompanied by changes in enzyme activities and cognate gene expression assessed using RT-PCR. Among the glucose metabolism regulating genes evaluated, hepatic glucokinase (GCK), the glucose transporters GLUT2 and GLUT4, and peroxisome proliferator-activated receptor-γ (PPAR-γ) were up-regulated, whereas glucose-6-phosphatase (G6 Pase) and phosphoenolpyruvate carboxykinase (PEPCK) were down-regulated in the liver of mice with RHSE-supplementation. These changes resulted in restoration of glucose-regulating activities to normal control levels. Histopathology showed that a high-fat diet intake also induced liver necrosis and damage of the islet of Langerhans in the pancreas, whereas RHSE supplementation restored necrotic damage to normal levels. Immunohistochemistry showed that RHSE supplementation can restore the reduced insulin-producing β-cell population in islet of Langerhans associated with a high-fat diet intake to nondiabetic normal control levels in a dose-dependent manner. RHSE-supplemented food could protect insulin-producing islet cells against damage triggered by oxidative stress and local inflammation associated with diabetes.