Background: Hyperglycemia is a serious health crisis worldwide, and more than 90% of the Sri Lankan patients effected with the condition have diabetes mellitus type 2. Natural therapeutic agents can manage the progression of the disease. Objectives: To investigate the hypoglycemic and antilipidemic effects of Cinnamomum zeylanicum (”Sri Wijaya” accession) water-soluble nutraceuticals in diabetic-induced and healthy Wistar rats. Materials and Methods: The diabetic and nondiabetic Wistar rats were treated with Cinnamon pressured water, Cinnamon decoction, pretreated pressured water Cinnamon extract for 1 month. The results were compared with the group treated with the positive control, Acarbose untreated normal group. Blood glucose and other biochemical parameters were estimated using commercial test kits. Results: There was a significant difference in the fasting serum glucose, food consumption, and water consumption in rats with induced diabetes. The total cholesterol level was significantly decreased in the normal groups treated with Cinnamon extracts, compared with the untreated groups. There was a significant increase in high-density lipoprotein cholesterol levels in the normal group treated with pressured water Cinnamon extract and decoction when compared with the Acarbose-treated diabetic group. Alanine aminotransferase (ALT) levels were significantly higher in the diabetic group treated with Acarbose than in all Cinnamon-treated groups. However, no significant difference was shown in normal rat groups for aspartate aminotransferase and ALT. Conclusion: Cinnamon nutraceuticals have the potential to reduce hyperglycemia in diabetic rats. Cinnamon extracts may inhibit α-amylase and α-glucosidase enzymes in rat pancreatic tissues.