Background: The hypoglycemic effects of hexane, chloroform and methanol extracts of leaves of Azadirachta indica (AI) were evaluated by oral administration in streptozotocin-induced severe diabetic rats (SD). Materials and Methods: The effect of chronic oral administration of the extract for 28 days was evaluated in streptozotozin diabetic rats. Lipid peroxidation, glycogen content of liver and skeletal muscles, insulin, superoxide dismutase (SOD), catalase (CAT), glutathione (GSH), oxidized glutathione (GSSG) levels were determined. In addition, advanced glycation end product formation (AGEs) was evaluated. Results: The most active extracts were obtained with chloroform. Chloroform extract from AI shows increased levels of SOD, GSH, GSSG and CAT, hepatic glycogen content, glucose-6-phosphatase and insulin plasma levels, which also decreased the glucokinase (GK), lipid peroxidation and insulin resistance. The chloroform extract exhibited significant inhibitory activity against advanced glycation end product formation with an IC50 average range of 79.1 mg/ml. Conclusion: Azadirachta indica can improve hyperlipidemia and hyperinsulinema in streptozocin-induced diabetic rats and, therefore, AI can be potentially considered to be an antidiabetic-safe agent.