Objective: The anti-diabetic efficacy of Atractylodes lancea water extract was verified by identifying the major active compounds, and quality control standards for water extracts were established by simultaneous HPLC quantification analysis. Methods: Thirteen compounds were isolated from the butanol fraction by bioactivity-guided approach using open-column chromatography. The compounds were identified by NMR and ESI/LTQ-Orbitrap-HRMS. The anti-diabetic activity was evaluated with anti-glycation and α-glucosidase assay. The simultaneous quantification by nine compounds was conducted by HPLC-PDA. Results: In total, 13 compounds from the butanol fraction were isolated. The water extract showed greater inhibitory effects than the hexane extract. Compounds 1, 2, 3, 5, 8, 10, 11, 12, and 13 showed high or significant activity. HPLC simultaneous analysis for these compounds was developed and validated to establish quality control standards, and the content standards of each compound were established through quantitative evaluation. Conclusion: To our knowledge, this study is the first to identify the main components and anti-glycation, α-glucosidase inhibitory activity of the water extract of A. lancea. This study scientifically and systematically established the quality control standards of traditional herbal medicine traditional herbal medicine through the development of a simultaneous HPLC quantitative analysis method and the establishment of content standards. It also demonstrates the potential of A. lancea water extract as a natural alternative treatment for diabetes.