The present study was carried out to investigate the antihyperglycemic and hypolipidemic effect of ginger in streptozotocin (STZ)-induced diabetic rats. Forty two male wistar rats were divided into seven groups and treatment was given as stated in experimental protocol. The two doses (100 mg/kg and 200 mg/kg bw) of ginger on blood glucose levels in diabetic rats were studied and the levels of malondialdehyde (MDA) and tissue lipids like total cholesterol (TC), triglyceride (TG) and phospholipids (PL) were estimated in the kidney tissue of diabetic rats. The effects were compared with glibenclamide, a reference standard. Diabetic rats showed a significant increase in kidney MDA, TG, TC and PL levels. Treatment with ginger and glibenclamide resulted in a significant diminution of blood glucose levels. Oral administration of ginger for 30 days to diabetic rats decreased the levels of MDA, TC, TG and PL. The decreased lipid peroxides and tissue lipids clearly showed hypolipidemic effect of ginger apart from its antidiabetic property. Our study suggests that phytochemicals and other bioactive compounds present in ginger may play an important role in suppressing the elevated tissue lipids in diabetic rats. Hence, ginger may be useful in the treatment of diabetes.