Sedentary lifestyle, consumption of energy-rich diet, obesity and longer lifespan are some of the major reasons for the rise of metabolic disorders like type II diabetes, obesity, hypertension and dyslipidemia among people of various age groups. High fat diet induced diabetic rodent models resembling type II diabetic condition in human population were used to assess the anti-diabetic and hypolipidemic activity of guggulsterone (isolated from Commiphora mukul resin). Four groups of rats were fed high fat diet, for 16 weeks. On feeding the normal rats with fat rich diet they showed increased serum glucose, cholesterol and triglyceride levels along with increase in insulin resistance significantly (p<0.05) in comparison to control animals. Different biochemical parameters like GTT, glycogen content, glucose homeostatic enzymes (like glucose-6-phosphatase, hexokinase), insulin release in vivo and expression profiles of various genes involved in carbohydrate and lipid metabolism clearly demonstrated the hypoglycemic effect of this extract. Guggulsterone demonstrated a differential effect with a significantly improved PPARgamma expression and activity in in vivo and in vitro conditions, respectively. However, it inhibited 3T3-L1 preadipocytes differentiation in vitro. The results presented here suggest that the guggulsterone has both hypoglycemic and hypolipidemic effect which can help to cure type II diabetes.