Abstract: The present invention relates to a process for preparing an antidiabetic natural compound and pharmaceutical use of said compound. An antidiabetic Sequoyitol powder is obtained by extracting a medicinal plant, such as Taxus spp, etc., with a solvent, and separating by diphase extraction and chromatography, and it is further purified to obtain its main component, a natural single compound having significant antidiabetic effects. The structure of said compound is confirmed by spectra, chemical synthesis and X-ray single-crystal diffraction pattern, to be 5-O-methyl-myo-inositol (Sequoyitol). Sequoyitol has a significant antidiabetic activity, is able to significantly alleviate hyperglycemia of diabetes, inhibit the decomposition of hepatic glycogen and the absorption of glucose, reduce blood fat level, improve the metabolism of free radicals, and protect ? cells of pancreatic island; and has a very low toxicity.