A decoction of stem bark of Oroxylum indicum Vent. (OI) is taken (2-3 times/day) by the tribal people of Sikkim, India to treat diabetes but scientific validation of its overall potential is lacking. Present study was aimed to assess in vitro antihyperglycemic activity of standardized OI extract using inhibition of α-glucosidase, BSA glycation and enhancement of insulin sensitivity. Antidiabetic and antioxidant modulatory effects of OI extract along with the blood biomarkers of toxic response were studied in streptozotocin (STZ) induced diabetic rats. In vitro analysis showed strong antioxidant capacity of OI -and potential to inhibit BSA glycation and α-glucosidase activity which was comparable to standard counterparts. Extract also improved insulin sensitivity in mature 3T3-L1 adipocytes. In vivo effects of OI extract (oral 250 mg/kg b.wt.) on STZ induced type II diabetic rats normalized the antioxidant status (p≤0.01). Analysis of blood biomarkers of toxic response indicated its safety. Lowering of total cholesterol and HDL levels (p≤0.05) and restoration of glycated Hb (p≤0.01) were also found in OI treated diabetic rats. HOMA-IR, QUICKI analysis along with area under the curve analysis showed the capacity of OI extract to enhance the insulin sensitivity significantly (p≤0.01) which was confirmed by increased GLUT-4 translocation in skeletal muscles.