Astragali Radix is a significant traditional Chinese medication, and has a long history of clinical application in the treatment of diabetes mellitus (DM) and its complications. AS-IV is an active saponin isolated from it. Modern pharmacological study shows that AS-IV has anti-inflammatory, anti-oxidant and immunomodulatory activities. The popular inflammatory etiology of diabetes suggests that DM is a natural immune and low-grade inflammatory disease. Pharmacological intervention of the inflammatory response may provide promising and alternative approaches for the prevention and treatment of DM and its complications. Therefore, this article focuses on the potential of AS-IV in the treatment of DM from the perspective of an anti-inflammatory molecular basis. AS-IV plays a role by regulating a variety of anti-inflammatory pathways in multiple organs, tissues and target cells throughout the body. The blockade of the NF-κB inflammatory signaling pathway may be the central link of AS-IV’s anti-inflammatory effect, resulting in a reduction in the tissue structure and function damage stimulated by inflammatory factors. In addition, AS-IV can delay the onset of DM and its complications by inhibiting inflammation-related oxidative stress, fibrosis and apoptosis signals. In conclusion, AS-IV has therapeutic prospects from the perspective of reducing the inflammation of DM and its complications. An in-depth study on the anti-inflammatory mechanism of AS-IV is of great significance for the effective use of Chinese herbal medicine and the promotion of its status and influence on the world.