Objective To investigate the effects of %Yangshenguo Xiaoke% Capsule in different doses on the diabetic rabbits by analyzing the blood glucose, body weight, blood biochemical index, blood routine index, hemorrheology and the concentration of insulin. Methods Rendered diabetes due to alloxan monohydrate, the rabbits were administered orally %Yangshenguo Xiaoke% Capsule. in three doses(0.40 g/kg,0.20 g/kg,0.10 g/kg) once a day for four weeks. Then the rabbits' blood was collected and the blood biochemical indices and others were detected. Results The high and middle doses of the drug reduced the blood glucose remarkably compared with control (P<0.05) and could improve the hemorrheology index. Its hypoglycemic effect was similar to %Xiaoke% bolus. Conclusion %Yangshenguo Xiaoke% Capsule has the hypoglycemic effect on diabetic rabbits.