Ursolic acid (UA), a natural pentacyclic triterpenoid obtained from fruit and several traditional Chinese medicinal plants, exhibits anti-inflammatory and hypoglycemic properties. However, its protective effects against type 1 diabetes mellitus (T1DM) have not been explored. In this study, streptozotocin-induced T1DM rat models were established and treated with UA for six weeks. T1DM rats treated with UA were used to observe the effects of UA on body weight and fasting blood glucose (FBG) levels. Pathological changes in the pancreas were observed using immunohistochemical staining. The gut microbiota distribution was measured using 16S rDNA high-throughput sequencing. The proportions of Th17 and Treg cells were examined using flow cytometry. Protein and mRNA expression of molecules involved in Th17/Treg cell differentiation were assessed by quantitative real-time PCR and western blotting. The correlation between gut microbiota and Th17/Treg cell differentiation in T1DM was analyzed using redundancy analysis (RDA) analysis. Compared with the model group, FBG levels declined, and the progressive destruction of pancreatic β cells was alleviated. The diversity and uniformity of gut microbiota in T1DM rats treated with UA increased significantly. Interestingly, the Th17/Treg cell differentiation imbalance was corrected and positively correlated with the expression of Foxp3 and IL-10, and negatively correlated with the expression of RORγt, IL-17A, and TNF-α. These findings suggest that UA can lower FBG levels in T1DM rats, delay the progressive destruction of pancreatic β-cells, and modulate gut microbiota homeostasis and immune function in streptozotocin-induced T1DM rats.