Plants with antidiabetic activities provide important sources for the development of new drugs in the treatment of diabetes mellitus. In the present study, we investigated possible antihyperglycemic and antioxidative activities of the aerial part of the Matricaria chamomilla L. ethanolic extract (MCE) in streptozotocin (STZ; 70 mg/kg, i.p.)-induced diabetic rats. The following groups were assigned; sham (did not receive any substance), STZ + distilled water (control), STZ + 5 mg/kg glibenclamide, STZ + 20 mg/kg MCE, STZ + 50 mg/kg MCE, STZ + 100 mg/kg MCE. Diabetic rats were treated for 14 days by gavage. Postprandial blood glucose levels, malondialdehyde, reduced glutathione (GSH), nitrate, nitrite, ascorbic acid, retinol, beta-carotene, superoxide dismutase, and catalase levels were measured, and immunohistochemical studies were performed in all of the groups. The obtained data showed that STZ resulted in oxidative stress and affected the antioxidant status. Treatment with different doses of MCE significantly reduced postprandial hyperglycemia and oxidative stress, and augmented the antioxidant system. In histological investigations, MCE treatment protected the majority of the pancreatic islet cells, with respect to the control group. As a result, MCE exhibited significant antihyperglycemic effect and protected beta-cells in STZ-diabetic rats, in a dose-dependent manner, and diminished the hyperglycemia-related oxidative stress.