Piper betle vine is bestowed with a unique placement in the list of traditionally important plants. Betel leaves are popularly known as “Green gold” because of their nutritive and medicinal values. Recently, we have reported the presence of Hydroxychavicol (HC),a phenolic secondary metabolite as a major constituent in the ethanolic extract of betel leaves.Diabetes mellitus is a major metabolic disorder characterized by dysregulation of carbohydrate, protein and lipid metabolism resulting from defects in insulin secretion, insulin action or both. Chronic hyperglycemia in diabetes leads to retinopathy, nephropathy, neuropathy and cardiovascular disease. Most of the currently available drugs for the treatment of diabetes often elicit undesirable side effects in addition to drug resistance after prolonged use. Search for novel drugs for the treatment of diabetes is still continuing due to the multifactorial nature of diabetes. Based on the folklore use, in the present study an attempt has been made to assess the hypoglycemic and hypolipidemic properties of hydroxychavicol, a major phenolic lead molecule present in the leaves of Piper betle L. in high fat diet fed - low dose STZ induced experimental type 2 diabetes in rats.Oral glucose tolerance test (OGTT) was performed to study the efficiency of hydroxychavicolon glucose homeostasis.Insulin resistance was also measured by HOMA-IR. The levels of fasting blood glucose, plasmainsulin, hemoglobin, glycosylatedhemoglobin, c-peptide and urine sugar were analyzed. Oral administration of hydroxychavicolat a concentration of 20mg/kg.b.w./rat/day to diabetic rats for a period of30dayssignificantlyimproved the altered levels of glucose homeostasis. Elevated levels of hepatic enzyme markers such as AST, ALT and ALP were reverted back to normal levels in diabetic group of rats with oral administration of hydroxychavicol. The altered activities of glycogen synthase and glycogen phosphorylase in hepatic tissues of diabetic rats were significantly reverted tonear normalcy upon oral treatment with hydroxychavicol. Additionally, the altered levels of lipid profile components observed in diabetic group of rats were normalized after oral treatment with hydroxychavicol. The efficacy of HC was comparable with metformin, a standard drug widely used for the treatment of diabetes. The results of the present study demonstrate the hypoglycemic and hypolipidemic properties of HC and also provide the scientific rationale for the use of Piper betle leaves in the treatment of diabetes.