Hypsyzigus marmoreus (HM), an edible mushroom, has several effects, including antitumor, antioxidant and anti-allergy properties. On the other hand, the possibly useful effect of HM in diabetic mice has not as yet been elucidated. In this study, we showed treatment with a water soluble extract from HM (EHM) to reduce fat deposits without affecting body weight loss in KK-A(y) mice. EHM treatment also abolished the expressions of pro-inflammatory adipokines, such as tumor necrosis factor α and monocyte chemoattractant protein 1, as compared with vehicle treatment. The expressions of uncoupling protein 3 and peroxisome proliferator-activated receptor gamma coactivator 1α in the soleus muscles of EHM treatment groups were significantly elevated as compared to those in vehicle-treated muscle tissues. These results raise the possibility that EHM can regulate both obesity and insulin resistance.