Phytic acid, inositol hexaphosphate (IP6) a natural plant constituent and antioxidant exhibits protective action in carcinogenesis, Alzheimer's, hypercholesterolemia, diabetes and inflammations when taken in diet. The aim of this study is to evaluate effect of phytic acid in streptozotocin (STZ)-nicotinamide-induced type 2 diabetes in rats. The STZ-nicotinamide induced diabetic rats were orally treated with vehicle (2%w/v Tween 80), glimepiride (2.5 mg/kg) and IP6 (650 mg/kg) for 28 days. The blood glucose level, body weight, glycosylated haemoglobin (HbA1C), lipid profile, lipid peroxidation, antioxidant status (liver and small intestine) was measured and compared with control. Xanthine dehydrogenase (XDH) and xanthine (XO) activity was measured in small intestine of diabetic rats. In vitro inhibition of carbohydrate digestive enzymes (α-glucosidase and α-amylase) was also determined. IP6, significantly (P<0.01) reduced glucose level, HbA1C, lipid profile and lipid peroxidation, and increased body weight, high density lipoprotein level and antioxidant status in liver and small intestine. Decrease in XO and increase in XDH activity was observed in treatment groups compared to diabetic control. Dose dependent inhibition of α-glucosidase and (α-amylase activity was observed for phytic acid when compared to standard drug acarbose. These results clearly indicate that IP6 possess promising in vitro and in vivo antidiabetic activity.