Thujone, an ingredient of essential oils of many different medicinal herbs, has been demonstrated to have blood-glucose-lowering effect in various diabetic models; however, the underlying cellular hypoglycemic mechanism(s) of thujone action remains to be fully defined. This study, therefore, was designed to explore thujone’s underlying hypoglycemic mechanisms using in vivo diabetic model. Male Wister rats were rendered diabetic by a single intraperitoneal injection of Streptozotocin (STZ) (55 mg/kg). Thereafter, rats were divided into four groups (non-diabetic control, diabetic control, non-diabetic with thujone and diabetic with thujone) and were orally given either thujone (60 mg/kg) or vehicle for 4 weeks. Increased plasma glucose, impaired Oral Glucose Tolerance Test (OGTT), decreased plasma insulin, impaired GLUT4 translocation and decreased AMPK and PI3K phosphorylation were recorded in diabetic control rats. After thujone administration, plasma glucose level and glucose tolerance, as estimated by OGTT were improved, whereas the plasma insulin level remained down-regulated. Moreover, thujone markedly restored the impaired GLUT4 translocation and fully ameliorated AMPK phosphorylation, while PI3-K phosphorylation remained inhibited. These results suggest that thujone has a high potentiality to induce hypoglycemia, at least in part, via the AMPK-dependent mechanism involving restoration of GLUT4 translocation.