Over-activation of the local chymase-angiotensin II (Ang II) system has a dominant role in diabetic cardiomyopathy. Astragalus polysaccharides (APS) are used in traditional Chinese medicine to boost immunity. In this study, we investigated the effects of APS treatment on cardiac function, myocardial collagen expression, cardiac ultrastructure, cardiac matrix metalloproteinase (MMP) activity, levels of plasma glycosylated serum protein (GSP), and myocardial enzymes, and the expression of Ang II, chymase, and angiotensin-converting enzyme (ACE) in the diabetic hamster myocardium. Diabetes was induced by a single injection of streptozotocin (60 mg/kg ip). The experimental groups consisted of normal control (n = 15), diabetic (n = 15), insulin-treated diabetic (n = 15, NPH 1-2 U/day ip), and APS-treated diabetic (n = 30, APS 1-2 g/kg/day orally for 10 weeks) hamsters. Diabetic hamsters treated with insulin or APS exhibited significantly decreased blood glucose, plasma GSP, and myocardial enzymes, as well as improvements in cardiac function and cardiac ultrastructure. Compared with insulin treatment, APS treatment significantly reduced myocardial collagen (type I and III) expression and lowered cardiac MMP-2 activity, myocardial Ang II levels, myocardial chymase expression, and p-ERK1/2 kinase expression. In diabetic hamsters, myocardial ACE expression and plasma Ang II levels was not altered by insulin or APS treatment. These results indicate that treatment of diabetic hamsters with APS inhibited the local chymase-Ang II system and improved markers of diabetic cardiomyopathy.