Berberine (BBR) is a promising anti-diabetic isoquinoline alkaloid from Rhizoma coptidis, while its bioavailability was extremely low. Here, the existing form and pharmacokinetics of BBR were comparatively characterized in conventional and antibiotic-induced pseudo germ-free (PGF) rats. Furthermore, we comparatively investigated the antidiabetic effect and potential mechanism of BBR and its intestinal oxidative metabolite oxyberberine (OBB) in STZ-induced diabetic rats. Results showed that BBR and OBB existed mainly as protein-bound form in blood, while protein-bound OBB was significantly depleted in PGF rats. Treatment with OBB and BBR effectively decreased clinical symptoms of diabetic rats, reduced blood glucose level, ameliorated the pancreatic damage, and mitigated oxidative stress and inflammatory markers. However, the anti-diabetes effect of BBR was obviously compromised by antibiotics. In addition, OBB exerted superior anti-diabetes effect to BBR of the same dose, significantly up-regulated the mRNA expression of Nrf2 signaling pathway and substantially promoted the pancreatic levels of PI3K/Akt signaling pathway. In conclusion, BBR and its absorbed oxidative metabolite OBB were mainly presented and transported in the protein-bound form in vivo. The gut microbiota may play an important role in the anti-diabetes effect of BBR through transforming itself into the superior hypoglycemic metabolite OBB. OBB possessed favorable hypoglycemic and pancreatic β-cells protective effects, which may stand a huge potential to be further developed into a promising anti-diabetes candidate.