Jiao Tai Wan (JTW), a Chinese herbal formula containing Rhizoma Coptidis and Cortex Cinnamomi, has been used for diabetic treatment for many years. The aim of this study was to determine the main components in JTW and to investigate the effects of JTW on hepatic lipid accumulation in diabetic rats and humans. JTW extract was prepared and the main components were assayed by HPLC. An animal model of diabetes mellitus was established and JTW was administered intragastrically. In the clinical study, diabetic patients with poor glycemic control were treated with JTW. Blood glucose and lipid parameters, liver histology, hepatic triglyceride content and lipogenic gene expression were examined. Our data demonstrated that JTW significantly improved hyperglycemia, hyperlipidemia and hepatic lipid accumulation in diabetic rats. This was accompanied by the down-regulation of acetyl coenzyme A carboxylase (ACC) and fatty acid synthase (FAS) protein expressions, and the up-regulation of AMP-activated protein kinase (AMPK) and phosphorylated-ACC (pACC) protein expressions in the liver tissues. Diabetic patients also exhibited decreases in their hepatic triglyceride content. The results suggest that JTW attenuates hepatic lipid accumulation in diabetic rats and humans. These beneficial effects are possibly associated with the inhibition of lipogenic gene expression in the liver.