The present study investigates the extraction, phytochemical profile, and antidiabetic activity of Fagonia arabica, a plant traditionally used in folk medicine for various ailments. An ethanolic extract of Fagonia arabica was prepared and yielded 8.5% (W/W). Phytochemical screening revealed the presence of several bioactive compounds, including carbohydrates, flavonoids, phenols, saponins, proteins, alkaloids, glycosides, and tannins, while diterpenes, lignins, and sterols were absent. The total flavonoid and phenol contents were quantified at 0.922 mg and 0.632 mg per 100 mg of dried extract, respectively. The antidiabetic potential of the ethanolic extract was evaluated using an alloxan-induced diabetic rat model. Significant reductions in blood glucose levels were observed in the extract-treated groups compared to the diabetic control, with Group III showing a reduction from 270.6 ± 11.9 mg/dL to 120.5 ± 10.1 mg/dL. Furthermore, the extract positively influenced body weight, serum insulin levels, and liver glycogen content. The treated groups demonstrated improved body weight maintenance, increased serum insulin levels, and enhanced liver glycogen stores compared to the diabetic control. These results indicate that Fagonia arabica possesses substantial antidiabetic activity, likely attributable to its diverse phytochemical constituents. The findings support further exploration of Fagonia arabica as a potential therapeutic agent for diabetes management.