Abstract: Provided is a composition for treating and preventing diabetes or diabetic complications comprising an extract of herbal combination as an effective ingredient. The composition for treating and preventing diabetes or diabetic complications includes an extract of herbal combination of bitter melon, caterpillar fungus, wolfberry tree bark, white mulberry bark, winged euonymus, kudzu root, Solomon's seal, white atractylodes rhizome, mondo grass rhizome, Japanese cornel fruit and ginseng as an effective ingredient. The composition increases secretion of insulin in a type 2 diabetic animal, improves insulin resistance and exhibits potent blood sugar-lowering and diabetic complication inhibiting activities. Further, since it is safe with natural product ingredients, it may be usefully used to prevent and improve diabetic diseases and inhibit diabetic complications.