Type 2 diabetes mellitus has been a major health issue with increasing morbidity and mortality due to macrovascular and microvascular complications. The urgent need for improved methods to control hyperglycemic complications reiterates the development of innovative preventive and therapeutic treatment strategies. In this perspective, xanthone compounds in the pericarp of the mangosteen fruit, especially α-mangostin (MGN), have been recognized to restore damaged pancreatic β-cells for optimal insulin release. Therefore, taking advantage of the robust use of nanotechnology for targeted drug delivery, we herein report the preparation of MGN loaded nanosponges for anti-diabetic therapeutic applications. The nanosponges were prepared by quasi-emulsion solvent evaporation method. Physico-chemical characterization of formulated nanosponges with satisfactory outcomes was performed with Fourier transform infra-red (FTIR) spectroscopy, differential scanning calorimetry (DSC), and scanning electron microscopy (SEM). Zeta potential, hydrodynamic diameter, entrapment efficiency, drug release properties, and stability studies at stress conditions were also tested. Molecular docking analysis revealed significant interactions of α-glucosidase and MGN in a protein-ligand complex. The maximum inhibition by nanosponges against α-glucosidase was observed to be 0.9352 ± 0.0856 µM, 3.11-fold higher than acarbose. In vivo studies were conducted on diabetic rats and plasma glucose levels were estimated by HPLC. Collectively, our findings suggest that MGN-loaded nanosponges may be beneficial in the treatment of diabetes since they prolong the antidiabetic response in plasma and improve patient compliance by slowly releasing MGN and requiring less frequent doses, respectively.