Tecoma stans is a flowering perennial shrub or small tree, 5-7.6 m in height. The leaves bark, and roots contain many biologically active chemicals, and extracts from those tissues have been used in traditional folk medicine to treat many diseases and conditions. The aim of the present study is to evaluate its antidiabetic potential in animals. The dried stem bark of the plant was extracted using ethanol and acute a toxicity study of ethanolic extracts was investigated which did not show any toxic symptoms in doses up to 2000 mg/kg over 14 days. The oral antidiabetic activity of the ethanolic extract (250 and 500 mg/kg) was screened against streptozotocin (50 mg/kg; i.p.) + nicotinamide (120 mg/kg; i.p.) induced diabetes mellitus in rats. The investigational drug was administered for 21 consecutive days, and the effect of the extract on blood glucose levels was studied at regular intervals. At the end of the study, the blood samples were collected from all the animals for biochemical estimation, and the animals were sacrificed and the liver and pancreatic tissues were collected for histopathologic analysis. Ethanolic extract showed significant antidiabetic activity at 250 and 500 mg/kg, respectively, and this effect was comparable with that of glibenclamide.