Amelioration of rodent type 2 diabetes by hemin has been linked to increased heme oxygenase (HO) activity, however alternative mechanisms have recently been proposed for its anti-diabetic effect. We sought to determine the anti-diabetic efficacy of heme arginate (HA), a clinically licensed preparation of heme, and whether its predominant mode of action is via increased HO activity. Intravenous administration of HA reduced hyperglycemia in diabetic (db/db) mice. Co-administration of the HO inhibitor stannous (IV) mesoporphyrin IX dichloride (SM) resulted unexpectedly in a further improvement in glycaemic control despite restoring HO activity to baseline levels. The anti-diabetic effects of HA±SM were associated with increased adiposity, increased serum adiponectin levels, reduced adipose tissue and islet inflammation and preservation of islet β-cell function. HO activity independent effects of HA on adipogenesis and β-cell inflammation were further confirmed in cell culture models using the 3T3-L1 pre-adipocyte and MIN6 β-cell lines, respectively. In conclusion, our work demonstrates that the heme component of HA ameliorates experimental type 2 diabetes by promoting metabolically favourable adipogenesis and preserving islet β-cell function, but this is not mediated via increased HO activity.