The antidiabetic potential of caffeic acid in fructose/streptozotocin-induced type 2 diabetic rats was examined in this study. Male Sprague-Dawley rats were supplied with 10% fructose solution for 14 days followed by an intraperitoneal injection of 40 mg/kg bw streptozotocin to induce type 2 diabetes (T2D). Rats were treated with both low (150 mg/kg bw) and high (300 mg/kg bw) doses of caffeic acid for 5 weeks, while the positive control group was treated with metformin (200 mg/kg bw). Treatment with caffeic acid significantly decreased blood glucose levels and elevated serum insulin levels while improving glucose tolerance, pancreatic β-cell function and morphology. It also led to a significant reduction of serum cholesterol, triglyceride, LDL-cholesterol, ALT, AST, creatinine, urea and uric acid levels, while increasing HDL cholesterol levels. Caffeic acid significantly (P < 0.05) elevated hepatic glycogen level, serum and pancreatic glutathione level, superoxide dismutase and catalase activities with a concomitant decrease in malondialdehyde level, α-amylase, lipase, adenosine triphosphatase (ATPase), ectonucleoside triphosphate diphosphohydrolase (ENTPDase), 5'-nucleotidase (5'-NTD) and acetylcholinesterase activities. The results suggest caffeic acid as a potent natural product with therapeutic effects against T2D. Further molecular and clinical studies are, however, required to ascertain these findings.