Hygrophila auriculata (K. Schum.) Heine (Family: Acanthaceae) is a wild herb widely used in 'Ayurveda' as 'Rasayana' drug for treatment of various disorders. Treatment of diabetic rats with aerial parts of Hygrophila auriculata extract (HAEt, 100 and 250 mg/kg body weight) for 3 weeks showed significant reduction in blood glucose, thiobarbituric acid reactive substances (TBARS) and hydroperoxide in both liver and kidney. The treatment with HAEt significantly increased the glutathione (GSH), glutathione peroxidase (GPx), glutathione S-transferase (GST) and catalase (CAT) in the drug-treated group, which is comparable to the control group. HAEt and glibenclamide-treated rats also showed decreased lipid peroxidation that is associated with increased activity of superoxide dismutase (SOD) and catalase. The ability of HAEt on tissue lipid peroxidation and antioxidant status in diabetic animals has not been studied before. The result of this study thus shows that HAEt possesses significant antidiabetic activity along with potent antioxidant potential in diabetic conditions.