Hypoglycaemic effect was observed with Azadirachta indica when given as a leaf extract and seed oil, in normal as well as diabetic rabbits. The effect, however, was more pronounced in diabetic animals in which administration for 4 weeks after alloxan induced diabetes, significantly reduced blood glucose levels. Hypoglycaemic effect was comparable to that of glibenclamide. Pretreatment with A. indica leaf extract or seed oil administration, started 2 weeks prior to alloxan, partially prevented the rise in blood glucose levels as compared to control diabetic animals. The data suggests that A. indica could be of benefit in diabetes mellitus in controlling the blood sugar or may also be helpful in preventing or delaying the onset of the disease.