Chamomile is considered as one of the oldest and also documented as medicinal plant. It has shown to be an anti-inflammatory, astringent and antioxidant especially in floral part since ancient times. Recent studies reported that chamomile has potential to lower blood sugar levels in hyperglycemia. In the present study we have investigated the pharmacological effects of chamomile tea on fasting and post prandial glucose levels and HbA1C in blood of diabetic rats (alloxan induced) and the results were compared with glibenclamide as standard. Statistical analysis was performed using SPSS. It has been observed in our study that it has reduced progressively the fasting and post prandial blood sugar levels, significantly in alloxan induced diabetic rats particularly on day 30 and 60. It also reduced the level of HbA1C significantly at the end of the study and the effects were similar to that of the standard group. Chamomile tea administration has also controlled the reduction in weight in diabetic rats as compared to diabetic control and the results were not very much different from standard. Results from the present study indicate that chamomile tea have a glucose lowering effect in diabetic rats so its daily consumption can be potentially useful in hyperglycemia and it can be used as a substitute of conventional drug treatment. Further studies are necessary to elucidate the exact molecular mechanism involved in anti-diabetic action of chamomile.