Diabetes mellitus is the most common chronic disease in the world, and a wide range of drugs, including Chinese herbs, have been evaluated for the treatment of associated metabolic disorders. This study investigated the potential hypoglycemic and renoprotective effects of an extract from the solid-state fermented mycelium of Cordyceps sinensis (CS). We employed the KK/HIJ diabetic mouse model, in which the mice were provided with a high-fat diet for 8 weeks to induce hyperglycemia, followed by the administration of CS or rosiglitazone for 4 consecutive weeks. Several parameters were evaluated, including changes in body weight, plasma lipid profiles, oral glucose tolerance tests, insulin tolerance tests, and plasma insulin concentrations. Our results show that the CS extract significantly elevated HDL/LDL ratios at 4 weeks and decreased body weight gain at 8 weeks. Interestingly, CS treatment did not lead to obvious improvements in hyperglycemia or resistance to insulin, while in vitro MTT assays indicated that CS protects pancreatic beta cells against the toxic effects of STZ. CS also enhanced renal NKA activity and reduced the accumulation of mesangial matrix and collagen deposition. In conclusion, CS extract can potentially preserve β-cell function and offer renoprotection, which may afford a promising therapy for DM.