In our previous research, Cordyceps militaris (CM) had a hypoglycemic effect in normal rats. In this study we wanted to elucidate whether CM also had an effect on diabetic rats. Twelve rats with streptozotocin-induced diabetes were separated randomly into 2 groups. First, aqueous extracts of CM 10 mg/kg (CM group) or saline (control group) was fed to the rats; then the plasma glucose levels were assayed. Second, the signaling proteins IRS-1 and GLUT-4 collected from the muscle were detected. Finally, another 2 groups of rats were injected with atropine 0.1 mg/kg intraperitoneally just before the CM/saline feeding, and the assays mentioned above were repeated. Blood glucose decreased 7.2% in the CM group but only 1.5% in the control group (P < 0.05). The IRS-1 signal was 2.9-fold higher than actin in the CM group but only 0.8-fold higher in the control group (P < 0.005). In GLUT-4 signal, the difference was 1.7- vs. 0.6-fold, respectively, compared with actin (P < 0.05). However, atropine injection made CM-induced hypoglycemia or elevation of IRS-1 and GLUT-4 not significant. In conclusion, CM had a hypoglycemic effect in diabetic rats and atropine blocked it. Therefore, the cholinergic activation also was considered to be involved in the hypoglycemic effect of CM in rats with streptozotocin-induced diabetes.