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Diabetes Mellitus (DM) is the third leading cause of death after heart disease and cancer in many developed countries. Its prevalence is about 6% worldwide and the number of cases, presently estimated at more than 150 million, is predicted to be doubled by 2025. Therefore, the demand for safe and effective drugs for the treatment of DM is on the rise. Present study was carried out to evaluate hypoglycemic effect of rhizome of Pakhanbed, in experimental animals. The study was carried out in Wistar rats of 5 groups of 10 animals each. Group I was served as plain control. After overnight fasting groups II, III, IV and V were injected single dose of Streptozotocin (50mg/kg, i.p.). Group II was kept as negative control. Groups III, IV were given extract of Pakhanbed 120.75mg and 241.5mg/kg respectively. Blood samples were taken on 0th, 10th, 28th, and 56th days. The effect of test drug was observed on body weight, fasting blood glucose (FBG), postprandial blood glucose (PBG), urine output, urine sugar and compared with standard (group V), Glibenclamide (600?g/kg). Hydroalcoholic extract of test drug demonstrated significant increase in body weight of groups III, IV and V. On 28th day FBG, PBG were reduced significantly in group III (p<0.05) and group IV( p<0.1), and on 56th day the reducing FBG and PBG were strongly significant in group IV (p<0.01). Percentage decreases in urine output and urine sugar were found significant. On the basis of above finding it can be concluded the test drug possesses significant hypoglycemic effect