The hypolipidaemic effect of an aqueous extract of Casearia esculenta root, an indigenous antidiabetic medicine popularly used in rural South India was investigated. Administration of the extract of C. esculenta (200 and 300 mg/kg body wt.) for 45 days resulted in significant reduction in serum and tissue cholesterol, phospholipids, free fatty acids and triglycerides in streptozotocin (STZ) diabetic rats. In addition to that, significant (p < 0.05) decrease in high density lipoprotein (HDL) whereas significant increase (p < 0.05) in low density lipoprotein (LDL) and very low density lipoprotein (VLDL) were observed in STZ diabetic rats, which was normalized after 45 days of C. esculenta root extract treatment. The root extract at dose of 300 mg/kg body wt. showed much significant hypolipidaemic effects than the dose of 200 mg/kg body weight.