Although the anti-diabetic activity of cinnamic acid, a pure compound from cinnamon, has been reported but its mechanism(s) is not yet clear. The present study was designed to explore the possible mechanism(s) of anti-diabetic activity of cinnamic acid in in vitro and in vivo non-obese type 2 diabetic rats. Non-obese type 2 diabetes was developed by injecting 90 mg/kg streptozotocin in 2-day-old Wistar pups. Cinnamic acid and cinnamaldehyde were administered orally to diabetic rats for assessing acute blood glucose lowering effect and improvement of glucose tolerance. Additionally, insulin secretory activity of cinnamic acid and cinnamaldehyde was evaluated in isolated mice islets. Cinnamic acid, but not cinnamaldehyde, decreased blood glucose levels in diabetic rats in a time- and dose-dependent manner. Oral administration of cinnamic acid with 5 and 10 mg/kg doses to diabetic rats improved glucose tolerance in a dose-dependent manner. The improvement by 10 mg/kg cinnamic acid was comparable to that of standard drug glibenclamide (5 mg/kg). Further in vitro studies showed that cinnamaldehyde has little or no effect on glucose-stimulated insulin secretion; however, cinnamic acid significantly enhanced glucose-stimulated insulin secretion in isolated islets. In conclusion, it can be said that cinnamic acid exerts anti-diabetic activity by improving glucose tolerance in vivo and stimulating insulin secretion in vitro.