Diabetes mellitus (DM) is one of the most common lifestyle diseases, caused due to endocrine disorder. DM is commonly associated with hyperglycemia, a condition which is generally followed by an overproduction of free radicals leading to tissue oxidative stress. Currently, the focus of medical fraternity lies in developing therapeutic drugs based on natural origin in order to reduce the hyperglycemia associated toxicity. Ferulic acid (FA) is a ubiquitous hydroxycinnamic acid displaying an array of therapeutic properties, including anti-diabetic effect which could be attributed to its potent antioxidant capacity. However, due to low bioavailability and clinical efficacy of FA, its biomedical applications remained limited. In the present study, FA encapsulated chitosan nanoparticles (FANPs) were synthesized through ionotropic gelation process with an aim to enhance FA bioavailability. The plasma release and urinary excretion profiles of FANPs were compared with that of free FA using healthy Wistar albino rats as a model system. The encapsulated FA displayed extended plasma retention time and maximum plasma concentration was recorded at 60 min which implied four times enhancement of Tmax compared to free FA. The elimination of compound from the animal body also displayed a similar pattern where the peak urinary excretion of FA from nanoformulations. FANPs were also tested for their anti-hyperglycemic effects in streptozotocin (STZ) induced diabetes in Wistar albino rats and were found to attenuate the diabetes-associated symptoms. FANPs caused an enhancement in body weight, decrease in blood glucose level along with a regulatory effect on blood lipid profile of diabetic rats. Positive impact of FANPs in improving the hyperglycemic condition prevalent in diabetic rats might provide new avenues for the treatment of DM and help avoid secondary complications associated with the synthetic drugs.