The present study was carried out to investigate the antidiabetic and antioxidant effect of methanolic extract of Berberis tinctoria leaves (MEBT), in streptozotocin induced diabetic rats. Oral administration of MEBT extract (150 mg/kg and 300 mg/kg) for a period of 14 days. Blood glucose levels, body weight food and liquid intake were measured on every $5^{th}$ day over a period of 14 days. In diabetic rats, MEBT at the dose of 150 mg/kg and 300 mg/kg body weight resulted in significant reduction in blood glucose levels. The study was further investigated to determine antioxidant and antihyperlipidemic potential of MEBT in streptozotocin (STZ) induced diabetic rats. These results suggest that the MEBT possess antidiabetic activity and is able to ameliorate biochemical damages in STZ induced diabetic rats and the results were found to be in a dose dependent manner.