Inflammatory stimulation plays a significant role in the development and worsening of insulin-resistant diabetes. Therefore, it is crucial to identify therapeutic agents that can alleviate insulin resistance by targeting inflammation. Here, we present evidence that Bakuchiol (BL), a monoterpene phenolic compound first discovered from Psoralea corylifolia L. as traditional Chinese medicine, can effectively improve insulin resistance in diabetic mice through anti-inflammation. Our findings demonstrate that BL alleviates inflammation by inhibiting the toll-like receptor 4/nuclear factor κB/mitogen-activated protein kinase axis, consequently enhancing insulin receptor signaling through the c-Jun N-terminal kinase/suppressors of cytokine signaling 3/insulin receptor substrate1 pathway and improving glucolipid homeostasis. Furthermore, the insulin recovery achieved with BL (60 mg/kg) was comparable to that of metformin (200 mg/kg). These results provide further support for considering BL as a potential treatment option for insulin-resistant diabetes mellitus.