ABSTRACTPterocarpus marsupium (Roxb.) (family Fabaceae) is widely used as a traditional medicine to treat various diseases, including diabetes. However, the molecular mechanism of Pterocarpus marsupium has not been investigated. Two fractions (2.5% and 5%) of extract from the medicinal plant Pterocarpus marsupium (PME) were administered in a dose-dependent manner in rats with streptozotocin-induced (45 mg/kg body weight) type 2 diabetes. Each fraction of PME was administered intragastrically at a dose of 50, 100, and 200 mg/kg body weight for 45 days. The effective dose 200 mg/kg body weight of 5% fraction was more pronounced in reducing the levels of blood glucose (95.65 mg/dL) and glycosylated hemoglobin (HbA1c) (0.41 mg/g Hb) and increasing the plasma insulin (16.20 µU/mL) level. The altered activities of the key enzymes of lipid metabolism along with the lipid profile in diabetic rats were significantly reverted to near normal levels by the administration of PME 5% 200 mg/kg body weight fraction. PME (200 mg/kg body weight) has the ability to reduce oxidative stress and inflammatory cytokines, such as tumor necrosis factor-alpha (TNF-α) Interleukin-6 (IL-6) messenger ribonucleic acid (mRNA), as well as protein expression and apoptotic marker, such as caspase-3 enzyme, in diabetic hepatic tissue. Biochemical findings were also supported by histological studies, such as improvement in pancreas and liver. Pterocarpus marsupium could effectively reduce the inflammation and hyperglycemic condition in diabetic rats; hence, it could be a useful tool in the management of diabetes.