In this study, the optimum conditions of fermentation were determined by isolating the microorganisms with the ability to bioconvert the Citrus peel flavonoid, and the effect of the fermented Citrus peel extract which was bioconverted on the oxidative damage of HIT-T15 cell was investigated. The Aureobasidium pullulans Y-12 was isolated and identified with the strains having bioconversion activity. The fermentation conditions for bioconversion activity were confirmed to be optimal when culturing for three days at $25^{circ}C$, 150 rpm in a culture medium containing 5% Citrus peel power and 0.8% casitone. As a result of bioconversion, 32.8 mg/g and 21.5 mg/g of naringenin and hesperetin, which were aglycone flavones, were produced respectively. Also in the flavonoid content, it was confirmed that FCP produced 154.8 mg/g while CP produced 33.7 mg/g, thus producing more by approximately 4.6 times. As a result of treating FCP and CP after inducing the oxidative damage for HIT-T15 cell by treating the deoxy-D-ribose with $IC_{50}$ (38 mM) concentration, the surviving rate was recovered to 90% for FCP treatments in the 0.01 mg/mL concentration and for CP treatments in the 0.025 mg/mL concentration. Also in the insulin secretion rate, FCP treatments increased by 206% and CP treatments by 132% when treated in the 0.1 mg/mL concentration. As the bioconverted FCP can inhibit the oxidative damage of HIT-T15 cell in the low concentration, it was considered its usability as the functional material for prevention of the type 2 diabetes.