A study was undertaken to evaluate the antihyperglycemic activity of aqueous extract of bark of Garuga pinnata Roxb. (Burseraceae). The various parameters studied included fasting blood sugar levels, serum lipid levels, liver glycogen content, serum insulin level and glycated hemoglobin in diabetic and normal rats. Streptozotocin-nicotinamide was used to induce type-II diabetes mellitus. Treatment with the extract at two dose levels showed a significant increase in the liver glycogen and serum insulin level and a significant decrease in fasting blood glucose and glycated hemoglobin levels. The total cholesterol and serum triglycerides levels were also significantly reduced and the HDL cholesterol levels were significantly increased upon treatment with the extract thus proving the potent antidiabetic property of the plant.