The invention relates to a pharmaceutical composition having a blood sugar reducing effect. The pharmaceutical composition is prepared from the following raw materials: astragalus membranaceus, gorgon fruit, fructus rosae laevigatae, seed of Chinese dodder, burdock root, rhizoma anemarrhenae, yam, lalang grass rhizome, angelica, chrysanthemum, purslane, root of red-rooted salvia, radix ophiopogonis, ginseng, rhizoma atractylodis, folium mori, dendrobe, polished round-grained rice, medlar, root of Chinese trichosanthes, root of common peony, baked ginger, dogwood, raspberry, radix polygonati officinalis, myrrh, root of kudzu vine, ligusticum wallichii, prepared rehmannia root and fruit of Chinese magnoliavine. The pharmaceutical composition has high effective rate on diabetes and avoids relapse after curing; the pharmaceutical composition is simple in process, can low production cost and relieve economic burden of patients, and has a broad application prospect.