In the present study we describe the effects of hot water extract of the culinary-medicinal button mushroom, Agaricus bisporus, on the symptoms of streptozotocin-induced diabetes in Sprague Dawley rats. A. bisporus extract at the doses of 0, 100, 200, and 400 mg/kg body weight (bw) per day were orally applied to streptozotocin-induced diabetic rats for a period of 7 days after the onset of the diabetes. Food and water intake and body weight were recorded daily. Upon sacrifice, histological studies were performed on pancreas tissues, and biochemical parameters such as glucose, insulin superoxide dismutase, malondialdehyde and catalase were measured of all experimental groups. The serum glucose levels significantly decreased after oral administration at the dose of 400 mg/kg bw per day by 29.68% with A. bisporus extract. Furthermore, the serum insulin levels in the streptozotocin-induced diabetic rats were increased to 78.50% at the extract dose of 400 mg/kg bw per day. Also, catalase activities and malondialdehyde levels decreased to values slightly above the normal animal control. The most obvious and surprising change was, however, the increase in cellularity of the Langerhans islets of the pancreas and their apparent repopulation with beta cells. We conclude that the oral application of high doses of A. bisporus extract may result in decreased severity of streptozotocin-induced diabetes in rat.