Naringenin (NAR) has various biological activities but low bioavailability. The current study examines the effect of Naringenin-loaded hybridized nanoparticles (NAR-HNPs) and NAR on depression induced by streptozotocin (STZ) in rats. NAR-HNPs formula with the highest in vitro NAR released profile, lowest polydispersity index value (0.21 ± 0.02), highest entrapment efficiency (98.7 ± 2.01%), as well as an acceptable particle size and zeta potential of 415.2 ± 9.54 nm and 52.8 ± 1.04 mV, respectively, was considered the optimum formulation. It was characterized by differential scanning calorimetry, examined using a transmission electron microscope, and a stability study was conducted at different temperatures to monitor its stability efficiency showing that NAR-HNP formulation maintains stability at 4 °C. The selected formulation was subjected to an acute toxicological test, a pharmacokinetic analysis, and a Diabetes mellitus (DM) experimental model. STZ (50 mg/kg) given as a single i.p. rendered rats diabetic. Diabetic rat groups were allocated into 4 groups: one group received no treatment, while the remaining three received oral doses of unloaded HNPs, NAR (50 mg/kg), NAR-HNPs (50 mg/kg) and NAR (50 mg/kg) + peroxisome proliferator-activated receptor-γ (PPAR-γ) antagonist, GW9662 (1mg/kg, i.p.) for three weeks. Additional four non-diabetic rat groups received: distilled water (normal), free NAR, and NAR-HNPs, respectively for three weeks. NAR and NAR-HNPs reduced immobility time in forced swimming test and serum blood glucose while increasing serum insulin level. They also reduced cortical and hippocampal 5-hydroxyindoeacetic acid, 3,4-Dihydroxy-phenylacetic acid, malondialdehyde, NLR family pyrin domain containing-3 (NLRP3) and interleukin-1beta content while raised serotonin, nor-epinephrine, dopamine and glutathione level. PPAR-γ gene expression was elevated too. So, NAR and NAR-HNPs reduced DM-induced depression by influencing brain neurotransmitters and exhibiting anti-oxidant and anti-inflammatory effects through the activation PPAR-γ/ NLRP3 pathway. NAR-HNPs showed the best pharmacokinetic and therapeutic results.