To investigate the effect of Jiangtang Xiaoke granule (JTXKG) on hepatic function and oxidative stress in type 2 diabetic KKAy mice. Methods: A total of 30 KKAy mice were fed by high-fat-diet for 4 weeks, T2DM model were established by FBG≥11.1 mmol·L-1. The T2DM mice were then randomly divided into model group, pioglitazone group and JTXK granule groups in low (1.75 g/kg), medium (3.5 g/kg), and high (7 g/kg) doses. The normal group had 6 C57BL/6J in it. After 10-week treatment, the serum ALT, AST, γ-GT, MDA, SOD and hepatic MDA, SOD, GSH were measured. Results: Compared with model group, T2DM mice supplemented with 1.75 g/kg dose of JTXK granule has lower serum ALT, γ-GT, MDA (P<0.01) and higher SOD activity (P<0.05). However, it has little effect on hepatic oxidative stress index. T2DM mice fed with 3.5 and 7 g/kg dose of JTXK granule has lower serum ALT, γ-GT, serum and hepatic MDA and higher SOD, GSH activities significantly (P<0.01). Conclusion: JTXKG can improve hepatic function and oxidative stress in T2DM mice.