In India, Adenanthera pavonina is traditionally used in the treatment of diabetes mellitus and lipid disorders. In the present study, the antihyperglycaemic and lipid lowering effect of Adenanthera pavonina seed aqueous extract (APSAE) was evaluated using streptozotocin induced diabetes in rats. Streptozotocin was given at the dose of 55 mg/kg, i.p. After induction of diabetes, APSAE was administered for 30 days p. o. and simultaneously different biochemical parameters like plasma glucose, HbA1c, serum triglyceride, cholesterol, LDL-cholesterol and HDL-cholesterol were estimated. Diabetic control showed significant increase (P < 0.01) in plasma glucose, serum triglyceride, cholesterol, LDL-cholesterol and significant decrease (P < 0.01) in serum HDL-cholesterol and HbA1c. Treatment with APSAE showed significant reduction (P < 0.01) in plasma glucose when compared with diabetic control. The elevated levels of serum triglyceride and cholesterol levels were significantly reduced (P < 0.01) by APSAE. APSAE treatment for 30 days showed significant decrease in serum LDL-cholesterol (P < 0.01) and significant increase in serum HDL cholesterol level (P < 0.01). Moreover, diabetic control there was significant decrease in HbA1c which was significantly increased (P < 0.05) by treatment with APSAE. Hence, from the result obtained in the present study it can be confirmed that Adenanthera pavonina has the potential to treat diabetes condition and associated lipid disorders.