Background Human insulin-like growth factor-I (hIGF-I) is a growth factor which is highly resemble to insulin. It is essential for cell proliferation and has been proposed for treatment of various endocrine-associated diseases including growth hormone insensitivity syndrome and diabetes mellitus. In the present study, an efficient plant expression system was developed to produce biologically active recombinant hIGF-I (rhIGF-I) in transgenic rice grains. Results The plant-codon-optimized hIGF-I was introduced into rice via Agrobacterium-mediated transformation. To enhance the stability and yield of rhIGF-I, the endoplasmic reticulum-retention signal and glutelin signal peptide were used to deliver rhIGF-I to endoplasmic reticulum for stable accumulation. We found that only glutelin signal peptide could lead to successful expression of hIGF-I and one gram of hIGF-I rice grain possessed the maximum activity level equivalent to 3.2 micro molar of commercial rhIGF-I. In vitro functional analysis showed that the rice-derived rhIGF-I was effective in inducing membrane ruffling and glucose uptake on rat skeletal muscle cells. Oral meal test with rice-containing rhIGF-I acutely reduced blood glucose levels in streptozotocin-induced and Zucker diabetic rats, whereas it had no effect in normal rats. Conclusion Our findings provided an alternative expression system to produce large quantities of biologically active rhIGF-I. The provision of large quantity of recombinant proteins will promote further research on the therapeutic potential of rhIGF-I.