Kursi Wufarikun Ziyabit (KWZ) is a classic traditional medicine used for the prevention treatment of diabetes in China. It was widely used as healthcare tea in folk and can prevent and treat type 2 diabetes. However, the underlying mechanism of KWZ in type 2 diabetes has not been investigated extensively. Here, the weekly body weight and blood glucose level of KWZ in type 2 diabetes db/db male mice were observed. After 4 weeks of treatment, the physiological changes and pharmacological effects of KWZ were investigated. The results showed that KWZ can significantly decrease fasting blood glucose and improve glucose tolerance and insulin sensitivity in db/db mice. The serum/liver lipid profiles such as LDL-C, TC, TG, and serum-free fatty acid/Fructosamine levels were decreased, and the serum/liver HDL-C levels were increased. In addition, significant improvement in glucose metabolism enzymes and antioxidant enzymes in experimental mice's livers was observed. Moreover, the expression of GRP78, p-IRE1 alpha/IRE1 alpha, p-eIF2 alpha/eIF2 alpha, and XBP1s was decreased. The expression of p-PERK/PERK, p-Akt/Akt, and p-GSK-3 beta/GSK-3 beta was markedly increased. These results suggested that KWZ is effective for type 2 diabetes by improving endoplasmic reticulum (ER) stress in the liver of db/db mice, and it might prevent the damage of insulin Beta cells and alleviate insulin resistance.