The leaf of Lycium barbarum L. (LLB) has been widely used as a tea, vegetable, and herb in China and Southeast Asia for centuries; this is because of the hypoglycemic effect it has, but the mechanism behind this effect is still unclear. In this study, a type 2 diabetic mellitus (T2DM) rat model, induced by a high-fat diet combined with low-dose streptozotocin (STZ) injections, was adopted. The biochemical index was determined and the histopathological and metabolomics analyses of serum and urine and 16S rDNA sequencing of the gut microbiota were performed. We evaluated the hypoglycemic effects and the mechanism of action of the water extract from LLB, which contained neochlorogenic acid, chlorogenic acid, caffeic acid, and rutin (up to 6.06%). The relationships between biochemical indexes, serum and urine metabolites, and gut microbiota were analyzed. The results showed that the LLB extract could noticeably modulate the levels of blood glucose and lipids in diabetic rats as well as repair injuries in livers, kidneys and pancreas. The changes in serum and urine metabolites caused by T2DM were reversed after the administration of LLB; these changes were found to mainly be correlated with the following pathways: nicotinate and nicotinamide metabolism, arachidonic acid metabolism, and purine metabolism. Sequencing of the 16S rDNA from fecal samples showed that the LLB extract could reverse the gut microbiota dysbiosis that T2DM had induced. Therefore, we conclude that T2DM, which altered the metabolic profiles and gut microbiota, could be alleviated effectively using the LLB extract.