Cinnamomi Cortex was a material as medicinal and edible resources and it has been demonstrated that Cinnamomi Cortex aqueous extract (CCAE) possess hypoglycemic effect, but there were no active compounds identified as quality standard of CCAE to be used in the investigate of hypoglycemic activity. Hence, in this study, the quality standard and the hypoglycemic effect of CCAE were investigated. Cinnamaldehyde and coumarin as the quality control in CCAE were analyzed by high performance liquid chromatography (HPLC) method. The results showed that the average yield of extraction was 10.06%. The concentration of coumarin was linear with peak area ranging from 0.02–1.00 μg/mL (r = 0.999 6, n = 6) and that of cinnamaldehyde also demonstrated a good linear relationship with peak area in the range of 1.05–52.50 μg/mL (r = 0.999 7, n = 6). The average recovery rate of coumarin and cinnamaldehyde was 99.42% and 100.11%, respectively. The investigation of hypoglycemic effect revealed that CCAE could improve weight loss, lower liver and pancreas indices, improve organ damage caused by diabetes, and lower fasting blood glucose, glycosylated serum protein (GSP) and total cholesterol (TC) levels. The results showed that CCAE can reduce fasting blood glucose and blood lipid levels in diabetic mice.