The therapeutic potential and molecular mechanism of phycocyanin from Spirulina on alloxan-induced diabetes mice was investigated. In the experiment, 4-week treatment of phycocyanin at the dose of 100 and 200 mg/kg body weight in alloxan-induced diabetes mice resulted in improved metrics in comparison with alloxan-induced diabetes group. These metrics include blood glucose levels, glycosylated serum protein (GSP), glycosylated hemoglobin (GHb) and fasting serum insulin (FINS) levels. As its molecular mode of action, phycocyanin leads to the increase of IRS-1 tyrosine phosphorylation and the decrease of IRS-1 serine phosphorylation, also accompany with increased level of Akt phosphorylation on Ser473 in the liver and pancreas in diabetic mice. In addition, phycocyanin treatment enhanced the glucokinase (GK) level in the liver and pancreas, and the glucokinase regulatory protein (GKRP) level in the liver in diabetic mice. The results suggest that phycocyanin ameliorates alloxan-induced diabetes mellitus in mice by activating insulin signaling pathway and GK expression in pancreas and liver in diabetic mice.