The leaf alcohol extract of the plant Annona squamosa was investigated for its antidiabetic activity. Type 2 diabetes mellitus was induced with standardised doses of streptozotocin and nicotinamide. Graded doses of the leaf alcohol extract suspended in gum acacia were administered to normal and experimental diabetic rats for 12 days. Fasting plasma glucose levels, serum insulin levels, serum lipid profiles and changes in body weight were evaluated in normal rats while liver glycogen levels and pancreatic TBARS levels were evaluated additionally in diabetic rats. The diabetic groups treated with the leaf alcohol extract were compared with standard glibenclamide. The findings showed the significant antidiabetic potential of the extract in ameliorating the diabetic conditions in diabetic rats. No significant effects were found in the normal rats.