This investigation was undertaken to study the effects of oral administration of Inonotus obliquus mycelia produced by a submerged culture on plasma glucose level and other biochemical parameters in streptozotocin (STZ)-induced diabetic rats. The mycelia, at the dose of 200 mg/kg body weight (BW), substantially reduced the plasma glucose level by as much as 23.1% as compared to the control group. The levels of total cholesterol and triglyceride in plasma were reduced to the extent of 12.6% and 22.6%, respectively. The activities of alanine transaminase (ALT) and aspartate transaminase (AST) were decreased by 27.6% and 21.9%, respectively, under the influence of I. obliquus mycelia. The general components of I. obliquus mycelia were found to contain 5.55% crude ash, 2.35% crude fat, 28.29% crude protein, 9.53% carbohydrate, and 54.28% dietary fiber.