Diabetes cure could lie in mushrooms.

An ancient mushroom once heralded as an elixir of immortality by Chinese royalty is being tested as a possible cure for modern day diabetes.

Sydney researchers are working to see whether the extra large medicinal fungi can reduce high blood pressure, glucose and cholesterol.

When coupled with insulin resistance, these conditions bring about metabolic syndrome, a precursor to type-two diabetes which affects an increasing number of Australians.

Scientists at the University of Western Sydney believe the mushroom, called ganoderma lucidum, can offer much-needed clinical evidence of new treatments for the syndrome.

Also known as Reishi, the Asian herb has been treated as a cure-all to fight a wide range of diseases for 2000 years, said PhD researcher Nerida Klupp.

It was thought to be an elixir of immortality, enhancing vitality and helping to delay ageing, Ms Klupp said.

"At its most rare, it was only available to Chinese royalty due to its mystical properties," she said.

Cultivation has increased over the last 30 years, and preliminary animal and human pilot studies seem to suggest it can have a positive effect on blood sugar levels, cholesterol levels and blood fats.

The mushroom - an inedible fungi typically the size of a bread and butter plate - contains about 200 active chemical compounds, but researchers believe a group called the polysaccharides are the most effective.

Traditional users believe it is most potent when taken in combination with another medicinal mushroom called cordyceps sinensis.

The researchers will put this theory to the test when they enlist 170 people with metabolic syndrome symptoms for a four-month trial.

Participants will get either capsules of powdered Reishi alone, a combination of the two mushrooms, or a placebo capsule.

If successful, it could become the first single treatment for the metabolic syndrome.