Natural remedies from medicinal plants are considered to be effective and safe alternatives to treat diabetes mellitus. Solanum torvum Swartz. fruit is widely used in the traditional system of medicine to treat diabetes. In the present study methyl caffeate, isolated from S. torvum fruit, was screened for its efficacy in controlling diabetes in animal models. Antihyperglycemic effect of methyl caffeate was studied in normal glucose-fed rats. The effects of oral administration of methyl caffeate (10, 20 and 40mg/kg) for 28days on body weight, fasting blood glucose, plasma insulin, hemoglobin, glycated hemoglobin, total protein, hepatic glycogen and carbohydrate metabolism enzymes in streptozotocin induced diabetic rats were investigated. Histological observations in the pancreas and GLUT4 expression in skeletal muscles were also studied. Methyl caffeate at 40mg/kg significantly prevented the increase in blood glucose level after glucose administration at 60min in comparison to the hyperglycemic control group. In streptozotocin induced diabetic rats, methyl caffeate produced significant reduction in blood glucose and increased body weight. The levels and/or activities of other biochemical parameters were near normal due to treatment with methyl caffeate. Methyl caffeate treated diabetic rats showed upregulation of GLUT4 and regeneration of β-cells in the pancreas. These results substantiated that methyl caffeate possessed hypoglycemic effect, and it could be developed into a potent oral antidiabetic drug.