In Central and South American traditional medicine, people use Cecropia obtusifolia Bertol (Cecropiaceae) for the treatment of diabetes mellitus. However, its hypoglycemic action mechanism at pancreatic and liver level has been poorly explored. The present research aimed to establish the influence of the aqueous extract of C. obtusifolia, standardized in its content of chlorogenic acid, on insulin secretion in RINm5F cells and over the liver carbohydrates and lipids metabolism, and to determine concomitantly its hepatoprotective effect on mice with streptozotocin-induced diabetes. In RINm5F cells, concentrations 5, 50, 100, and 200 μg/mL of aqueous extract of C. obtusifolia were used to determine [Ca2+]i and insulin secretion. In an acute study, the extract was administered at doses of 500 mg/kg. In another test (subacute), the extract was daily administrated to diabetic mice (200 mg/kg/day) for 30 days. Blood glucose levels and other biochemical parameters were determined, and a liver histological analysis was performed. In RINm5F cells, C. obtusifolia increased [Ca2+]i and insulin secretion, whereas in diabetic mice exhibited acute and subacute hypoglycemic effects. Daily administration of C. obtusifolia to diabetic mice also increased liver glycogen storage and glycogen synthase levels, without apparent changes in gluconeogenesis. Besides, it increased peroxisome proliferator-activated receptor-α (PPAR-α) and long-chain-fatty-acid-CoA ligase 1 (ACSL-1) expression and reduced triglycerides, transaminases (alanine aminotransferase and aspartate aminotransferase), and collagen fibers, modifying anti-inflammatory (adiponectin and interleukin-10) and inflammatory (tumor necrosis factor-α) cytokines in serum. Therefore, the hypoglycemic effect of C. obtusifolia implicates a dual action, promoting insulin secretion, liver glycogen accumulation, and hepatoprotection by decreasing collagen fibers and inflammatory markers, whereas it improves lipid metabolism, due in part to PPAR-α.