Male hypogonadism is frequently accompanied with type 2 diabetes due to testicular dysfunction, but the origin of the pathogenesis is not known. We measured whether pro-inflammatory factors including endoplasmic reticulum (ER) stress chaperones and inhibitory κBβ (IκBβ) contribute to testis damage in type 2 diabetic rats produced by a high-fat diet (HFD) and low dose streptozotocin (STZ). We determined whether these can be attenuated by the anti-inflammatory activity of argirein a derivative of rhein as compared to valsartan. Reduced testosterone and LH (luteinizing hormone) levels in serum were significant in association with a decrease in the levels of mRNA and steroidogenic acute regulatory protein (StAR), insulin receptor substrate (IRS-1), activated IκBβ and ER stress chaperone C/EBP homologous protein (CHOP) in the diabetic testis and sperm count, motility and sexual behaviors were reduced in vivo. Additionally, Leydig cells cultured with high glucose showed upregulated IκBβ, ER stress sensor PERK (PKR-like ER kinase) and p-Akt/Akt in vitro. These changes may be due to a component of inflammation linked to activated NADPH oxidase and were significantly alleviated by either argirein or valsartan. In conclusion, diabetic testopathy induced by a HFD and low STZ is characterized by an entity of inflammation and is alleviated by argirein and valsartan through normalizing activated IκBβ and ER stress.