The hypoglycemic and hypolipidemic effects of flavonoid rich extract obtained from seeds of Eugenia jambolana (EJ) was analyzed in streptozotocin induced diabetic rats. Hypoglycemic activity was assessed by reduction in fasting blood glucose (FBG) and peak blood glucose level within 60 min of glucose tolerance test (GTT) in mild and severe diabetic (MD and SD respectively) rats. Different biochemical parameters like glycogen biosynthesis, glucose homeostatic enzyme (glucose-6-phosphatase, hexokinase) activities demonstrated significant (p<0.05) improvement as compared to diabetic counter parts. Further, the flavonoids also stimulated 16% increase in insulin release in vitro from pancreatic islets. The hypolipidemic action after this extract supplementation was confirmed by significant (p<0.05) decrease in the levels of LDL (27% MD, 29% SD), triglycerides (about 35% MD, 37% SD) and increase in HDL (21% MD, 34% SD) over untreated diabetic rats. The above mentioned action of this plant extract was found to be through dual up regulation of both the peroxisome proliferators-activated receptors (PPARalpha and PPARgamma) up to about 3-4 folds (over control) and their capacity to differentiate 3T3-L1 preadipocytes. The present data suggests that the flavonoid rich extract from EJ plant has both hypoglycemic and hypolipidemic effects which can help the cure and management of diabetes.