Some clinical studies and animal researches have evaluated the efficacy of Traditional Chinese Medicine (TCM) and compared its effects with placebo or other antidiabetic drugs. TCM involves three particular plants, as an antidiabetic drug. Our present research planned to evaluate the efficacy of TCM on insulin sensitivity and other related metabolic factors in type 2 diabetic patients. There were 43 newly diagnosed type 2 diabetic patients enrolled in this study, who did not use any antidiabetic drugs before. They were randomly assigned into TCM and placebo groups, administrated with TCM and placebo, respectively. Glucose disposal rate, fasting plasma glucose, postprandial plasma glucose, glycated hemoglobin, and other metabolic components were assessed at baseline and end point. Glucose disposal rate increased from 5.12 ± 2.20 to 6.37 ± 3.51 mg kg⁻¹ min⁻¹ in the TCM group, ANCOVA analysis showed that glucose disposal rate in the TCM group was significantly improved as compared to that in the placebo group (P < 0.05). Other metabolic related components such as fasting plasma glucose, postprandial plasma glucose, glycated hemoglobin, systolic blood pressure, diastolic blood pressure, body mass index, retinol binding protein 4 were improved in TCM group, but no statistical differences was detected between the two groups. No severe side effect was found in TCM group. TCM can ameliorate insulin resistance in type 2 diabetes and it is safe and effective in newly diagnosed diabetic patients.