Abstract Background Diabetes mellitus causes low-grade chronic inflammation which leads to the development of long-term complications. Oral magnesium (Mg) intake amongst other effects was reported to reduce the levels of inflammatory markers. This study investigated the anti-inflammatory and insulin secretory activities in experimental type-2 diabetic rats (n=32) orally treated with Mg. Methods Experimental type-2 diabetic rats were induced with high fat diet and alloxan (50 mg/kg, single i.p.) for over 10 weeks prior to the experimental procedures. Male Wistar rats were divided into 4 equal groups: control, untreated experimental diabetics, and experimental diabetics treated orally with either metformin (Met) (250 mg/kg), or Mg (250 mg/kg), respectively, for 14 days. The blood glucose (BG) levels were monitored before experimental induction of diabetes and thereafter on days 1, 7, 10, and 14, respectively. Serum insulin, C-reactive protein (CRP), interleukin-6 (IL-6), and lipid profile were assessed using laboratory kits while pancreatic beta cell function (BCF) and insulin resistance were estimated using homeostasis model assessment equations. Results Significant increase in the BG level was observed in all experimental diabetic groups on day 1 compared to controls. On day 14, BG, BCF, triglyceride, cholesterol, and low-density lipoprotein levels were increased while the high-density lipoprotein level was reduced in untreated diabetics compared to other groups. Insulin and insulin resistance were increased in all groups compared to control. Serum insulin and IL-6 were reduced while CRP was elevated in diabetic treated groups (Met and Mg) compared to untreated diabetics. Conclusions This study shows a hypoglycemic, lipid regulatory, insulin stimulatory, and anti-inflammatory effect of oral Mg treatment in experimental type-2 diabetic rats.