Phlorizin exists in a number of fruits and foods and exhibits many bioactivities. The mechanism of its antidiabetic effect has been known as it can competitively inhibit sodium-glucose symporters (SGLTs). However, phlorizin has a wide range of two-phase metabolism in systemic circulation and shows poor oral bioavailability. An alternative mechanism may involve gut microbiota in intestine. Sixteen obese mice with type 2 diabetes (db/db) and eight age-matched control mice (db/+) were divided into three groups: diabetic group treated with phlorizin (DMT group), vehicle-treated diabetic group (DM group), and normal control group (CC group). Phlorizin was given in normal saline solution by intragastric administration for 10 weeks. After the last treatment course, body weight, energy intake, serum lipopolysaccharides (LPS), insulin resistance, and fecal short-chain fatty acids (SCFAs) were compared. 16S rRNA gene denaturing gradient gel electrophoresis (DGGE) and quantitative PCR were used to determine the changes in microbiome composition. Coadministration of phlorizin significantly prevented metabolic syndrome by decreasing weight gain, energy intake, serum lipopolysaccharides, and insulin resistance, and the fecal level of total SCFAs was dramatically increased, especially butyric acid. DGGE and quantitative PCR demonstrated that phlorizin coadministration increased the gut microbial diversity and the growth of Akkermansia muciniphila and Prevotella. Meanwhile, the gut microbiota structure of db/db mice after phlorizin treatment was improved and approached the normal group. The mechanism of the hypoglycemic action of phlorizin is associated with LPS decrease and gut microbiota changes; briefly, it acts in the intestine to modify gut microbial community structure, resulting in lower LPS load in the host and higher SCFAs producing beneficial bacteria.