The prevalence of diabetes is increasing worldwide with the trend of patients being young and creating a significant burden on health systems, including reproductive problems, but the effects of diabetes on embryo implantation are still poorly understood. Our study was to examine effects of diabetes on mouse embryo implantation, providing experimental basis for treating diabetes and its complications. Streptozotocin (STZ) was applied to induce type 1 diabetes from day 2 of pregnancy or pseudopregnancy in mice. Embryo transfer was used to analyze effects of uterine environment on embryo implantation. Our results revealed that the implantation rate is significantly reduced in diabetic mice compared to controls, and the change of uterine environment is the main reason leading to the decreased implantation rate. Compared to control, the levels of LIF and p-STAT3 are significantly decreased in diabetic mice on day 4 of pregnancy, and serum estrogen level is significantly higher. Estrogen stimulates LIF expression under physiological level, but the excessive estrogen inhibits LIF expression. LIF, progesterone or insulin supplement can rescue embryo implantation in diabetic mice. Our data indicated that the dysregulated LIF-STAT3 pathway caused by the high level of estrogen results in the impaired implantation in diabetic mice, which can be rescued by LIF, progesterone or insulin supplement.