Two water soluble extracts, GS3 and GS4, obtained from the leaves of Gymnema sylvestre, were tested in streptozotocin treated rats for their effects on blood glucose homeostasis and pancreatic endocrine tissue. In the diabetic rats, fasting blood glucose levels returned to normal after 60 days of GS3 and after 20 days of GS4 oral administration. Blood collected during the conduct of oral glucose tolerance tests was used to assay for serum insulin. GS3 and GS4 therapy led to a rise in serum insulin to levels closer to normal fasting levels. In diabetic rat pancreas, both GS3 and GS4 were able to double the islet number and beta cell number. This herbal therapy appears to bring about blood glucose homeostasis through increased serum insulin levels provided by repair/regeneration of the endocrine pancreas.