Potentilla discolor Bunge, a Chinese folk medicine, has been used for the treatment of diabetes for many years. Unfortunately, little information is available on its bioactive components and mechanism of action. We report the anti-diabetic effect of P. discolor on normal and alloxan-induced diabetic mice, as well as the possible constituents and mechanism responsible for this activity. We found that the standardized extract of P. discolor (EPD) had little effect on the glucose levels of normal mice, while a dose-dependent hypoglycemic effect was observed in diabetic mice. Glucose tolerance test data indicated that there was a significantly higher rate of glucose disposal after EPD treatment. Phytochemical characterization indicated that the major components of EPD were triterpenes and flavonoids that could inhibit the activity of glycogen phosphorylase (GP) in vitro. Tormentic acid, asiatic acid, and potengriffioside A exhibited inhibitory effects on GP (IC50=90.6, 65.4, and 85.9 µM, respectively). The inhibition on GP may be one molecular mechanism through which EPD ameliorates hyperglycemia. These results suggest P. discolor extract may offer an alternate treatment for diabetes. Drug Dev Res, 2009. © 2009 Wiley-Liss, Inc.