Helicteres isora (Sterculiaceae) root juice has been used in the treatment of diabetes by several ethnic groups in different parts of India. A program was initiated to elucidate the scientific basis for the antidiabetic activity of H. isora. Ethanolic extract of H. isora root caused significant reduction in plasma glucose, triglyceride and insulin levels at 300 mg/kg dose after 9 days of administration to insulin resistant and diabetic C57BL/KsJdb/db mice. In normoglycemic and mildly hypertriglyceridemic Swiss albino mice, the extract also showed significant reduction in plasma triglyceride and insulin levels, without affecting plasma glucose level. An ethanolic extract showed activity distinctly different from glybenclamide and acarbose but similar to troglitazone in these models. In high fat fed hamster model, the extract showed significant reduction in plasma lipid levels. In order to identify the active pharmacophore, the ethanolic extract was further subjected to sequential partitioning with low, medium and high polarity solvents, which yielded a semipurified fraction having both euglycemic and lipid-lowering activity. Our study suggests that the extract of H. isora has insulin-sensitizing and hypolipidemic activity and has the potential for use in the treatment of type-2 diabetes.