Polydatin (PD) has a broad range of pharmacological activities; however, its effects on diabetic liver damage are poorly studies. This work is aimed to explore possible protective effects of polydatin-loaded chitosan nanoparticles (PD-CSNPs) or PD against liver damage associated with diabetes. Diabetes was induced in rats using nicotinamide/streptozotocin treatment. Diabetic rats were then divided into six groups: normal control rats, diabetic control rats, and rats orally treated with PD, PD-CSNPs, equivalent unloaded CSNPs, or metformin daily for 4 weeks. Treatment with PD and PD-CSNPs significantly reduced the blood glucose content, lipid peroxidation in the liver, and activities of serum transaminases and carbohydrate metabolism enzymes (including succinate dehydrogenase and pyruvate kinase); by contrast, liver glycogen content, glutathione concentration, and activities of the antioxidant enzymes (superoxide dismutase, glutathione peroxidase, catalase, and glucose-6-phosphate dehydrogenase) were markedly increased compared with the control diabetic rats. Furthermore, expression of the tumor necrosis factor α and interleukin-1β mRNAs was significantly downregulated, while expression of glucose transporter 2 and glucokinase mRNAs was strongly upregulated vs. control diabetic rats. We concluded that PD-CSNPs and PD ameliorate diabetic liver damage by modulating glucose transporter 2 expression, affecting the activity of carbohydrate metabolism enzymes, and suppressing oxidative stress and inflammation, PD-CSNPs being more efficient than PD, probably due to higher bioavailability and prolonged release.