Tangningtongluo (TNTL), a traditional Chinese medicine, has been widely used in clinics for decades in southwest China. Its pharmacological properties and underlying molecular mechanisms remain unclear. The main goal of ethnopharmacology is to identify novel bioactive compounds derived from plants for use in indigenous medical practice. This knowledge can be used to develop novel pharmaceuticals. In the present study, hyperglycemic C57BL/KsJ‑db/db (db/db) mice were used to test the effect of TNTL on microvasculature of the retina and hypoglycemia. Metformin (Met) was selected as a positive control. 26‑week‑old mice were randomly assigned to receive either the anti‑diabetic agent Met [140 mg/kg body weight (BW)], 1.8, 0.9 or 0.45 g/kg BW TNTL, or a placebo. The fasting blood glucose, serum insulin and glycated hemoglobin levels were measured. Histopathologic examination of the pancreas was performed to confirm the hypoglycemic effect. Fluorescein angiography was applied to detect diabetes‑induced retinal angioma in the db/db mice. TNTL intake significantly decreased the fasting blood glucose level in a dose‑dependent manner. Additionally, TNTL intervention resulted in a significant decrease in the insulin resistance index. Notably, TNTL treatment markedly reduced the speed of retinal degeneration and mildly reversed microvascular caliber degeneration. Western blot analysis indicated that upregulation of phosphorylated insulin receptor substrate‑1 (p‑IRS‑1) by the administration of TNTL may be strongly involved in the improvement of insulin resistance. In conclusion, TNTL exerted a strong hypoglycemic effect and reversed retinal degeneration via upregulation of ISR‑1. The present findings provide important scientific evidence supporting TNTL as an effective alternative approach for the management of Type 2 diabetes mellitus.