In Indian traditional system of medicine, Moringa oleifera leaves (Moringaceae) is commonly used as healing herb to treat diabetes. This study was undertaken to determine the hypoglycemic effect and antihyperglycemic effect of Moringa oleifera aqueous extract in normal (normoglycemic) and alloxan induced diabetic rabbits respectively. Graded doses of the leaves extract (100, 200 and 300 mg/kg oral) were separately administered to groups of fasted normal and alloxan induced diabetic rabbits. The hypoglycemic and antihyperglycemic effect of the aqueous leaves extract was compared with that of Glibenclamide 0.5mg/kg in fasted normal and alloxan induced diabetic rabbits respectively. Following treatment, Moringa oleifera (100, 200 and 300 mg/kg oral) produced highly significant (p<0.001) reduction in blood glucose levels at 2nd hour in fasted normal and alloxan induced diabetic rabbits. But, maximum percentage reduction in blood glucose was seen with 200mg/kg dose when compared to control. The aqueous extract of the leaves of Moringa oleifera possesses hypoglycemic and antihyperglycemic activity in normal and alloxan induced diabetic rabbits respectively.