The handling of ingested glucose by the gut is important in the regulation of postprandial glucose concentrations and, hence glycaemic control and absorption of water is secondary to solute absorption. This study therefore assesses the effect of diabetes mellitus (DM) and treatment with Ocimum gratissimum (OG) on gut glucose and water absorption. Phytochemical analysis and LD50 of OG was conducted as preliminary studies. Diabetes was induced in group 2; diabetic untreated group (DM group) and 3; diabetic treated group (DMTgroup) with a single i.p dose of 65mg/kg of Streptotozocin (STZ), with the later treated with 1500mg/kg of OG. Tissue sections for histology were obtained by standard method and absorption of fluid and glucose conducted by the everted sac technique. The result showed that glucose uptake was significantly lower (P<0.05) in the DM and DMT groups compared to the control while the fluid uptake in the DMT group was significantly lower (P<0.05) than the DM group and lowest in the control group. OG treatment reduces glucose absorption but increases gut fluid intake. It is possible that the hypoglycemic effect of OG may be related to reduction in intestinal glucose absorption. This appears to be at the expense of the integrity of the intestinal epithelium.