Cortex Moutan (CM, root bark of Paeonia suffruticosa Andr.) is one of the common herbs found in anti-diabetic traditional Chinese medicine formulae. To study the potential anti-diabetic mechanisms of CM, four in vitro models (intestinal brush border membrane vesicles (BBMV), rat hepatoma cell line H4IIE, human skin fibroblasts cell line Hs68 and mouse adipocytes 3T3-L1) were used. CM showed significant in vitro anti-diabetic effects by inhibiting glucose uptake of BBMV and enhancing glucose uptake into Hs68 and 3T3-L1 cells. Using bioassay-guided fractionation, paeonol was confirmed to be one of the active constituents for inhibiting BBMV glucose uptake. With neonatal-streptozotocin diabetic rats, paeonol (200 and 400mg/kgbody wt.) was found to improve oral glucose tolerance in vivo. To the best of our knowledge, this is the first report on the anti-diabetic effect of paeonol.