Diabetes mellitus is a major cause of morbidity and mortality worldwide. Although scientific evidence supporting its therapeutic efficacy is lacking, the use of the tiger's milk mushroom (TGM; Lignosus rhinocerotis), which is native to tropical areas such as Malaysia, Indonesia, and the Philippines, has been found to contain a very large amount of potential antioxidants. In this study, rats were weighed and then intravenously injected with 35 mg/kg streptozotocin (STZ). Rats were left for 1 week before blood glucose concentrations were measured to determine the onset of diabetes before the next procedure was conducted. Rats with blood glucose exceeding 7.0 mmol/L were considered diabetic and were included in the experiment. All groups were fed their respective treatments twice daily for 2 months throughout the experiment. Antidiabetic and antioxidant properties of freeze-dried TGM powder, such as reduced glutathione (GSH), superoxide dismutase (SOD), lipid peroxidation (LPO), and catalase (CAT) activities, were investigated in liver samples. The biological compounds present in the freeze-dried TGM powder was found to exhibit antidiabetic properties by significantly reducing elevated blood glucose concentrations to a normal range (3.0-7.0 mmol/L) in Sprague-Dawley rats with streptozotocin-induced diabetes, and increasing the body weight of the rats. Freeze-dried TGM powder was also found to possess antioxidant activity by significantly increasing GSH, CAT, and SOD activities while reducing LPO (P < 0.05). THis study shows that freeze-dried TGM powder exhibits significant antidiabetic properties and may be a potential supplement in ameliorating diabetic complications.