The present study was designed to evaluate the effects of tyrosol, a phenolic compound, on the activities of key enzymes of carbohydrate metabolism in the control and streptozotocin-induced diabetic rats. Diabetes mellitus was induced in rats by a single intraperitoneal injection of streptozotocin (40 mg/kg body weight). Experimental rats were administered tyrosol 1 ml intra gastrically at the doses of 5, 10 and 20mg/kg body weight and glibenclamide 1 ml at a dose of 600 μg/kg body weight once a day for 45 days. At the end of the experimental period, diabetic control rats exhibited significant (p<0.05) increase in plasma glucose, glycosylated hemoglobin with significant (p<0.05) decrease in plasma insulin, total hemoglobin and body weight. The activities of key enzymes of carbohydrate metabolism such as phosphoenolpyruvate carboxykinase, fructose-1,6-bisphosphatase and glucose-6-phosphatase were significantly (p<0.05) increased and the activities of hexokinase and glucose-6-phosphate dehydrogenase were significantly (p<0.05) decreased in the liver and kidney of diabetic control rats. Further, antioxidants were lowered in diabetic control rats. A significant (p<0.05) decline in glycogen level in the liver and muscle and glycogen synthase activity in the liver and a significant (p<0.05) increase in the activity of liver glycogen phosphorylase were observed in diabetic control rats compared to normal control rats. Oral administration of tyrosol to diabetic rats reversed all the above mentioned biochemical parameters to near normal in a dose dependent manner. Tyrosol at a dose of 20mg/kg body weight showed the highest significant effect than the other two doses. Immunohistochemical staining of pancreas revealed that tyrosol treated diabetic rats showed increased insulin immunoreactive β-cells, which confirmed the biochemical findings. The observed results were compared with glibenclamide, a standard oral hypoglycemic drug. The results of the present study suggest that tyrosol decreases hyperglycemia, by its antioxidant effect.