Excessive and/or long-term glucocorticoid therapy reduces β-cell mass and induces hyperglycemia, which contribute to the development of steroid‑induced diabetes. Ceriporia (C.) lacerata is one of the white‑rot fungi and has been used in bioremediations, such as lignocellulose degradation, in nature. The pharmacologic effect of C. lacerata on steroid-induced β-cell toxicity is not known. In this study, we evaluated the effect of a crude extract from a submerged cultivation of C. lacerata on the survival and apoptosis of INS-1 rat insulin-secreting cells exposed to dexamethasone (Dex), a synthetic diabetogenic glucocorticoid. Treatment with the C. lacerata crude extract (CLCE) largely blocked the Dex-induced reduction in survival and apoptosis of INS-1 cells. Moreover, CLCE treatment inhibited Dex-induced protein kinase B (PKB) dephosphorylation without affecting Dex-induced extracellular signal-regulated protein kinase-1/2 dephosphorylation and MKP-1 upregulation. Importantly, the protective effect of CLCE on Dex-induced cytotoxicity in INS-1 cells was attenuated by LY294002, an inhibitor of PI3K/PKB. CLCE treatment, however, did not protect the INS-1 cells from the cytotoxic effects triggered by other insults, such as interleukin-1β (an inflammatory cytokine), streptozotocin (a diabetogenic drug), thapsigargin (a calcium mobilizing agent), and tunicamycin (an ER stress inducer). Collectively, these findings demonstrate for the first time the ability of CLCE to specifically protect INS-1 cells from Dex-induced cytotoxicity through the modulation of the PI3K/PKB pathway. It is suggested that CLCE may be applied for the prevention and/or treatment of steroid diabetes in which reduction of β-cell survival and induction of β-cell apoptosis play pathogenic roles.