In traditional medicine leaves of olive (Olea europaea L.) are used as a diuretic, hypotensive, antibacterial and antiatherosclerotic. In the present study, oral administration of 0.1, 0.25 and 0.5g/kg body wt. of the alcoholic extract of leaves of olive for 14 days on the level of glucose and insulin in healthy and streptozotocin-induced diabetic rats were evaluated. The results showed that oral administration of the alcoholic extract of olive exhibited a significant reduction in blood glucose and increased plasma insulin in diabetic rats. The extract didnot change the level of blood glucose and plasma insulin in healthy rats significantly. A comparison was made between the action of the alcoholic extract and a known antidiabetic drug, glibenclamide (600 g/kg body wt.). The hypoglycaemic effect of the extract was greater than that observed with glibenclamide.