The mechanism of hypoglycemic activity of Vaccinium bracteatum Thunb. leaf polysaccharide (VBTLP) was investigated using streptozotocin (STZ)-induced diabetic mice and dimethylbiguanide as the positive control. The results showed that after mice were administered VBTLP by gavage for six months, the serum insulin levels of mice in the high-dose VBTLP group was increased by 4.38%, the pancreatic β-cell function index increased by 83.40%, and the insulin secretion index increased by 63.83%, when compared with the control group. The liver antioxidant capacity of mice was significantly enhanced as well, wherein activities of superoxide dismutase (SOD), catalase (CAT), and glutathione peroxidase (GSH-Px) were increased by 2.49%, 1.74%, and 6.04%, respectively, and malondialdehyde (MDA) level was decreased by 6.12%. Based on mouse pancreatic tissue sections, VBTLP was speculated to have significant repair activity on pancreatic beta cell structure. According to the results of this study, we speculate that the hypoglycemic activity of VBTLP in STZ-induced diabetic mice results from stimulating insulin secretion, repairing the damaged pancreatic beta cells, and enhancing antioxidant capacity.