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Ginsenoside Rd, one of the major components entering into the circulation from ginseng, is beneficial to health; however, its role and mechanism in improving T2DM require further exploration. In the current study, we explored the hypoglycemic effects of Rd in diabetic db/db mice and examined the underlying mechanisms. The results disclosed that after Rd treatment for four weeks, hyperglycemia, insulin resistance, and pyruvate intolerance were improved; moreover, hepatic steatosis was ameliorated. Additionally, Rd increased the phosphorylated Akt ratio in insulin-regulated peripheral tissues and decreased hepatic gluconeogenic gene expression. In vitro experimental results demonstrated that Rd decreased cellular glucose output from insulin-resistant mouse and human hepatocytes. Rd reduced gluconeogenic gene expression through inhibiting Foxo1 transcriptional activity. Taken together, our results suggest that Rd mitigates hyperglycemia in db/db mice by enhancing insulin sensitivity and diminishing hepatic gluconeogenesis, thus providing a theoretical principle for applying ginseng and ginsenoside Rd on curing T2DM.