Oxidative stress is a biological entity quoted as accountable for several pathological conditions including diabetes mellitus. Chronic hyperglycemia in diabetes is associated with oxidative stress mediated tissue damage. Recently, we have reported that the oral administration of ethanolic extract of Physalis peruviana L. fruits significantly improve the glucose homeostasis in high fat diet-low dose STZ induced type 2 diabetes in experimental rats. The major objectives of the present study include HPLC analysis for the presence of major flavonoids present in the fruits extract, determination of total flavonoids content (TFC), total phenolic contents (TPC), and evaluation of invitro antioxidant capacity by DPPH and ABTS methods. The antioxidant properties of the fruits extract was evaluated in HFD-STZ induced type 2 diabetes in rats. Histological as well as ultrastructural observations were carried out in the pancreas and liver. The results of the present study indicate that the fruits extract has significant antioxidant potential which in turn attributed to the presence of biologically active flavonoids such as rutin, myricetin, quercetin and kaempferol. Further, the data suggest that the observed hypoglycemic activity may be due to the significant antioxidant properties of the fruits extract.