Gastrodia elata Blume (GE) has been used in traditional medicine as a sedative, an anti-convulsant and anti-epileptic drug. This study was performed to investigate antihyperglycemic effect of fermented-Gastrodia elata Blume (FGE) in streptozotocin (STZ)-induced type 1 diabetic mice. FGE was prepared by fermentation with Saccharomyces cerevisia. GE and FGE were orally administered at 20 or 100 mg/kg/day for 3 weeks to STZ (70 mg/kg)-induced diabetic mice. Administartion of FGE significantly reduced blood glucose levels in an oral glucose tolerance test (OGTT), fasting blood glucose (FBG), and glycosylated hemoglobin (HbA1c) compared to GE. In addition, FGE significantly decreased serum total cholesterol (TC), triglyceride (TG), low density lipoprotein cholesterol (LDL-C) and at the same time markedly increased serum high density lipoprotein cholesterol (HDL-C) and plasma insulin levels. The results of this experimental study indicate that FGE possesses antihyperglycemic effect in STZ-induced diabetic mice.