Methanol extract of the aerial parts of Phlomis persica Boiss. (Lamiaceae) (PPE) was studied to evaluate the effects of antidiabetic potential, by measuring fasting blood glucose, insulin, total antioxidant power (TAP), using ferric reducing antioxidant power (FRAP), lipid peroxidation (using thiobarbituric acid reactive substances, TBARS), superoxide dismutase (SOD), catalase (CAT), and glutathione peroxidase (GPx) on streptozotocin-induced diabetes in rats. Male Wistar rats were randomly divided into five groups of six animals each. Oral administration of PPE at doses of 100 and 200 mg/kg once a day for 10 days resulted in a significant reduction in fasting blood glucose and an increase in serum insulin levels, in comparison with diabetic control group. It also prevented diabetes-induced loss in body weight. Hepatic TAP increased and TBARS decreased following PPE treatments. The extract at 100 and 200 mg/kg increased the activity of hepatic SOD, CAT, and GPx in diabetic rats. It is concluded that PPE has antidiabetic potential that is comparable with glibenclamide. In conclusion, the results of the present study show positive effects of P. persica on experimental diabetes and thus the antidiabetic effect of PPE is related to its potential to inhibit hepatocellular oxidative stress.