Organic vanadium compounds offer several advantages in the treatment of diabetes, yet they are impractical to use because of known side effects. In order to ameliorate the side effects of vanadium, we conjugated it with quercetin to form bis(quercetinato)oxovanadium IV (BQOV). This study evaluates the effect of BQOV treatment on carbohydrate metabolism and overall oxidative stress in streptozotocin-induced (STZ) diabetic mice. Administration of BQOV orally to diabetic mice for 3 weeks led to a reduction of blood glucose levels and the animals exhibited normal glucose tolerance at the end of the study period. The increase in glucose uptake by skeletal muscle and liver as well as the normalization of mRNA levels of G-6-Pase and glucokinase in the liver after BQOV treatment pointed to improvements in carbohydrate metabolism. The analysis of the antioxidant status of serum, liver and pancreas revealed reduced oxidative stress in BQOV-treated animals compared to untreated diabetic controls. Serum analyses for kidney and liver function showed that BQOV treatment provoked total protection of the kidney and partial protection of the liver from diabetogenic insults. The number of insulin-positive cells and the amount of pancreatic insulin in treated mice (1.2038 ± 0.34 ng/mg tissue) did not account for pancreatic regeneration but suggested an insulin-mimetic action on the part of BQOV. Moreover, administration of BQOV for 3 weeks did not show any visible side-effects. This data indicate that BQOV is a safe and potent agent for diabetes treatment, because it is able to improve carbohydrate metabolism and to reduce overall oxidative stress.