In order to develop a new anti-diabetic α-glucosidase inhibitor, we compared the α-glucosidase inhibitory activity of the cell-free extracts of 48 strains of yeasts isolated from Korean fermented foods, and found that Pichia burtonii Y257-7 exhibited the highest α-glucosidase inhibitory activity of 55.6%. The α-glucosidase inhibitor was maximally produced when Pichia burtonii Y257- 7 was cultured in LB broth (initial pH of 6.0) at 28oC for 24 h. The α-glucosidase inhibitor, partially purified by Sephadex G-50 gel permeation chromatography and systematic solvents extraction, revealed potent hypoglycemic effects in normal rats and streptozotocin-induced diabetic rats after the oral administration of starch.