Traditional medicines are recently being focused on to treat diabetes and its complications because of their lack of toxic and/or side effects. This report describes the effects of 7-O-galloyl-D-sedoheptulose (GS), a polyphenolic compound isolated from Corni Fructus, on type 2 diabetic db/db mice with hepatic and pancreatic damage. We examined several biochemical factors and oxidative stress- and inflammation-related markers. In the serum, levels of glucose, leptin, insulin, C-peptide, resistin, tumor necrosis factor-α, and interleukin-6 were down-regulated, while adiponectin was augmented by GS treatment. In addition, GS suppressed the reactive oxygen species and lipid peroxidation in the serum, liver, and pancreas, but increased the pancreatic insulin and pancreatic C-peptide contents. These results were derived from attenuating the expression of nicotinamide adenine dinucleotide phosphate oxidase subunit proteins, Nox-4 and p22. Augmented nuclear factor (NF)-E2-related factor 2 and heme oxygenase-1 were reduced with a decrease in oxidative stress during GS treatment. NF-κB-related pro-inflammatory factors were also alleviated in hepatic tissue. Moreover, GS modulated the protein expressions of pro-inflammatory NF-κB, cyclooxygenase-2, inducible nitric oxide synthase, c-Jun N-terminal kinase (JNK), phosphor-JNK, activator protein-1, transforming growth factor-β, and fibronectin. Based on these results, we demonstrated that the anti-diabetic action of GS may be due to its anti-oxidative stress property and anti-inflammatory action.