Hyperglycemia is one of the main causes of oxidative stress in type 2 diabetes mellitus. During hyperglycemia, the increased level of various reducing sugars in the blood enhances the production of reactive oxygen species (ROS) and triggers tissue damage, especially in pancreatic beta-cells. Streptozotocin (STZ) is a diabetogen that causes diabetes mellitus via ROS-induced apoptosis in beta-cells. In this study, SR10, an herbal formulation consisting of the aqueous extracts of Radix Astragali, Radix Codonopsis and Cortex Lycii was examined for its antidiabetic effects in vitro. SR10 treatment resulted in significant enhancement of survival rate of rat pancreatic beta-cells which were treated by streptozotocin. SR10 apparently reduced apoptosis of streptozotocin-treated beta-cells by decreasing DNA fragmentation, sub-G(1) peak area and percentage of apoptotic cells. Nitric oxide (NO) production in streptozotocin-treated cells was inhibited by SR10 via the suppression of the expression of inducible nitric oxide synthase (iNOS). The implication of SR10 in treating type 2 diabetes mellitus was discussed.