Acetone extract of whole fruit powder of M. charantia (bitter gourd) in doses 25, 50 and 75 mg/100 g body weight lowered the blood glucose from 13.30 to 50% after 8 to 30 days treatment in alloxan diabetic albino rats, confirming antihyperglycemic effect of this plant in diabetic animals and humans. Histological observations with acetone extract showed different phases of recovery of beta cells of the islets of Langerhans of pancreas, which in the untreated diabetic rats were less in number and showed varied degree of atrophy. The most important finding of the present study was observation of the presence of small scattered islets among the acinar tissue in some experimental animals, which may reflect neoformation of islets from pre-existing islet cells. The liver of alloxan diabetic rats showed hydropic degeneration, fatty change and necrosis at some places but liver of extract treated animals was normal. Glycogen localization in liver of diabetic rats was faint but after 30 days treatment with different doses of extract, normal to heavy glycogen localization was observed.