To investigate the effects of coated liposome from Discorea rhizoma extract (DRE) in streptozotocin (STZ)-induced, we evaluated changes in body weight, fasting blood glucose, blood insulin and blood lipid concentrations in mice. Mice were divided into four groups: (DC), diabetic DRE at 10 ㎎/㎏ (DRE-1), diabetic DRE at 50 ㎎/㎏ (DRE-2), and diabetic DRE at 250 ㎎/㎏ (DRE-3). Mice had free access to water and diet (10 weeks). The DC group showed higher blood cholesterol than the DRE-1, DRE-2, DRE-3 groups. In glucose tolerance test, the DRE-1, DRE-2, and DRE-3 groups increased after 30 minutes in decremental glycemic response area under the curve. Fasting blood glucose levels in the DRE groups significantly decreased through 4 weeks. Plasma total cholesterol, triglyceride and LDL-cholesterol concentrations were also lower in the DRE groups. On the other hand, the DRE-1, DRE-2 and DRE-3 groups showed higher HDL-cholesterol and insulin levels than the DC group. Moreover, blood glucose and lipid levels significantly decreased in streptozotocin (STZ)-induced diabetic mice treated with DRE. These results indicate that DRE may reduce elevated blood glucose levels and serum lipid concentrations in hypoglycemic and diabetic mice, suggesting its usefulness as a functional food.