Abstract Background Diabetes and its related complications remain to be a major clinical problem. We aim to investigate the antidiabetic mechanistic actions of Plicosepalus Acaciae (PA) flowers in streptozotocin (STZ)-induced diabetic rats. Methods After diabetes induction, rats were divided randomly into five groups, including: 1) normal control group, 2) diabetic control group, 3) diabetic group treated with 150 mg/kg of ethanolic extract of PA flowers, 4) diabetic group treated with 300 mg/kg of ethanolic extract of PA flowers, and 5) diabetic group treated with 150 mg/kg of metformin. After 15 days of treatment; fasting blood glucose, glycated hemoglobin (HBA1c%), insulin, C-peptide, superoxide dismutase (SOD), catalase, reduced glutathione (GSH), malondialdehyde (MDA), triglyceride (TGs), total cholesterol (Tc), low density lipoprotein cholesterol (LDL-c), very LDL (VLDL), high DLc (HDL-c), tumor necrosis factor-α (TNF-α), and interleukin-6 (IL-6) levels were assessed. Histopathology of pancreas was also assessed. Results The results showed that PA flower ethanolic extract significantly reduced blood glucose, HBA1c%, MDA, TGs, Tc, VLDL, LDL-c, TNF-α, and IL-6 levels in a dose-dependent manner. All these parameters were already increased by diabetic induction in the untreated diabetic group. Treatment of diabetic rats with PA flower increased insulin, HDL-c, GSH, catalase, and SOD levels. Histological examination showed that the PA flower caused reconstruction, repair, and recovery of damaged pancreas when compared with the untreated group. Conclusions PA flower has a potential role in the management of diabetes as complementary and alternative therapy, due to its antioxidant, anti-inflammatory, hypolipidemic, hypoglycemic and insulin secretagogue effects.