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The aim of this study was to evaluate the antidiabetic activity of LH II purified from ethanolic seed extract of Eugenia jambolana in alloxan-induced mild diabetic (MD) and severely diabetic (SD) rabbits. Ethanolic extract upon chromatographic purification yielded partially purified hypoglycemic principle (SIII) which on further purification by sephadex LH 20 yielded pharmacological active compound LH II. Homogeneity of LH II was tested by HPLC. Phytochemical investigation of LH II by various structural spectra showed the presence of saturated fatty acid, Δ5 lipid and presence of sterol. LH II was administered orally at a dose of 10 mg kg−1 body weight to MD and SD. LH II resulted, significant fall in FBG at 90 min (21.2% MD: 28.6% SD), 7th day (35.6% MD) and 15th day (59.6% SD). Glycosylated hemoglobin was significantly decreased (50.5%) in SD after 15 days treatment (Tt). Plasma insulin levels were significantly increased (P <  .001). In vitro studies with pancreatic islets showed 3-fold increase in insulin levels as compared to untreated animals. LH II also showed extrapancreatic effect by significantly increasing (P <  .001) the activity of key enzymes of glycolysis and significantly decreasing (P <  .001) the activity of key enzymes of gluconeogenesis. Liver and muscle glycogen content were increased by 36.6 and 30% for MD, and 52 and 47% for SD, respectively. Thus, the present study demonstrates that LH II possesses potent antidiabetic activity and it is effective in both MD and SD rabbits.