In Indian traditional system of medicine, Dalbergia sissoo (DS) Roxb.(Family Fabaceae) is prescribed for the treatment of diabetes mellitus. In the present study, the antidiabetic effect of ethanolic extract of DS bark was investigated in alloxan (AL) induced diabetic rats. Oral administration of DS at the doses of 250 and 500 mg/kg was studied in AL-diabetic rats. The two doses caused significant reduction in blood glucose levels in all the models. The effect was more pronounced in 500mg/kg than 250 mg/kg. DS also showed significant increase in body weight and glycogen content in liver of AL-induced diabetic rats while there was significant reduction in the levels of serum triglyceride and total cholesterol. DS also showed significant improvement in the pancreas of AL-induced diabetic rats. The antidiabetic effect of DS was compared with glibenclamide, a well-known hypoglycemic drug. The results indicate that ethanolic extract of Dalbergia sissoo bark possesses significant antidiabetic activity.