Protein tyrosine phosphatase 1B (PTP1B) is a widely confirmed target of the type 2 diabetes mellitus (T2DM) treatment. Herein, we reported a highly specific PTP1B inhibitor 2,2',3,3'-tetrabromo-4,4',5,5'-tetrahydroxydiphenylmethane (compound 1), which showed promising hypoglycemic activity in diabetic BKS db mice. With the IC₅₀ value of 2.4 μM, compound 1 could directly bind to the catalytic pocket of PTP1B through a series of hydrogen bonds. Surface plasmon resonance analysis revealed that the target affinity [KD (equilibrium dissociation constant) value] of compound 1 binding to PTP1B was 2.90 μM. Moreover, compound 1 could activate the insulin signaling pathway in C2C12 skeletal muscle cells. We further evaluated the long-term effects of compound 1 in diabetic BKS db mice. Notably, oral administration of compound 1 significantly reduced the blood glucose levels of diabetic mice with increasing insulin sensitivity. In addition, the dyslipidemia of diabetic mice was also significantly improved by compound 1 gavage. The histological experiments showed that compound 1 treatment significantly ameliorated the disordered hepatic and pancreatic architecture and increased the glycogen content in the liver tissues as well as improved the insulin secretion function of pancreas. Taken together, our results manifested that the natural product compound 1 was a highly specific PTP1B inhibitor, which could activate insulin signaling pathway and ameliorate hyperglycemia and dyslipidemia in diabetic BKS db mice.