The present study was designed to evaluate the effects of Cyperus squarrosus plant extracts in streptozotocin-induced diabetic neuropathy. Diabetes was induced by a single administration of streptozotocin (65 mg/kg/intraperitoneally). After 72 hours to measure the fasting blood glucose levels, blood glucose levels more than 220 mg/dl, consider diabetic rats. Animals were divided into six groups, animals untreated with STZ were kept in a normal control group. STZ-induced diabetic rats orally administered with ethanolic and aqueous plant extracts (EECS & AECS) dose 200 & 400 mg/kg, p.o. for eight weeks, Rats were subjected to evaluate serum glucose, biochemical parameters, and test were performed on the initial day, 2n, 4th 6th and 8th week in all groups to evaluate the neuropathy by Eddy’s hot plate and tail immersion test respectively. Diabetic animals were treated with Glibenclamide (5 mg/kg) and plant extracts (200 & 400 mg/kg )for 8 weeks. Groups treated with Glibenclamide (5 mg/kg) and Cyperus squarrosus extracts (200 and 400 mg/kg) significantly reduced elevated serum glucose level & lipid profiles and restored the reduced body weight. After completion of work, we observe the changes in fasting serum glucose, triglysaroids LDL, cholesterol levels are significantly reduced in animals treated with aqueous extract 400mg/kg. Other side animals treated with extracts decrease in the severity of diabetic neuropathy compare with untreated diabetic rats. Finally concluded that Cyperus squarrosus plant exhibit anti-diabetic property and beneficial protection against neuropathy in STZ induced diabetic rats.