The mandarin Hon-Chi is the red yeast rice fermented with Monascus pilous and Monascus purpureus. The present study is designed to screen the effect of Hon-Chi on plasma glucose and investigate the possible mechanisms. After oral administration into fasting Wistar rats for 90min, Hon-Chi decreased the plasma glucose in a dose-dependent manner. In parallel to the reduction of plasma glucose, an increase of plasma level of insulin or C-peptide was also observed in rats receiving same treatment. Moreover, disruption of synaptic available acetylcholine (ACh) using an inhibitor of choline uptake, hemicholinium-3, or vesicular acetylcholine transport, vesamicol, abolished these actions of Hon-Chi. Also, physostigmine at concentration sufficient to inhibit acetylcholinesterase enhanced the actions of Hon-Chi. Mediation of ACh release from the nerve terminals to enhance insulin secretion by Hon-Chi can thus be considered. Both the plasma glucose lowering action and the raised plasma levels of insulin and C-peptide induced by Hon-Chi were also inhibited by 4-diphenylacetoxy-N-methylpiperdine methiodide (4-DAMP), but not affected by the ganglionic nicotinic antagonist, pentolinium or hexamethonium, indicating the mediation of muscarinic M(3) receptors. The results suggest that Hon-Chi has an ability to raise the release of ACh from nerve terminals, which in turn to stimulate muscarinic M(3) receptors in pancreatic cells and augment the insulin release to result in plasma glucose lowering action. Thus, Hon-Chi seems suitable to employ as the health food for increase of insulin secretion in the prevention of type-2 diabetes.