Diabetes mellitus has been recognized since antiquity. It currently affects as many as 285 million people worldwide and results in heavy personal and national economic burdens. Considerable progress has been made in orthodox antidiabetic drugs. However, new remedies are still in great demand because of the limited efficacy and undesirable side effects of current orthodox drugs. Nature is an extraordinary source of antidiabetic medicines. To date, more than 1200 flowering plants have been claimed to have antidiabetic properties. Among them, one-third have been scientifically studied and documented in around 460 publications. In this review, we select and discuss blood glucose-lowering medicinal herbs that have the ability to modulate one or more of the pathways that regulate insulin resistance, β-cell function, GLP-1 homeostasis, and glucose (re)absorption. Emphasis is placed on phytochemistry, anti-diabetic bioactivities, and likely mechanism(s). Recent progress in the understanding of the biological actions, mechanisms, and therapeutic potential of compounds and extracts of plant origin in type 2 diabetes is summarized. This review provides a source of up-to-date information for further basic and clinical research into herbal therapy for type 2 diabetes. Emerging views on therapeutic strategies for type 2 diabetes are also discussed.