Swietenia mahagoni is a tropical ever-green hardwood timber species of Meliaceace family. In recent years increasing number of Bangladeshi people are using the Mahagoni seeds for the management of diabetes. The aim of the investigation was to evaluate the antidiabetic activity of Sm-SEF7 fraction of seeds from the plant Swietenia mahagoniinstreptozocin induced diabetic rats. Diabetes was induced by a single dose of intraperitoneal injection of streptozocin (90 mg/kg) in Long-Evans rats. Glibenclamide (5 mg/kg) was used as a standard antidiabetic agent. The result indicated that after oral ingestion of Swietenia mahagoni for 21 days in diabetic rat, a significant plasma glucose lowering effect (plasma glucose in mmol/l, Mean ± SD; 8.81 ± 1.22 vs. 3.57 ± 3.38, on the 1st day vs. 22nddays,p = .002) was improved. It also enhanced insulin releasing activity (plasma insulin in ng/ml, Mean ± SD: group 1 vs. group 3, 0.54 ± 0.13 vs. 0.93 ± 0.19; p=0.001) was significantly higher in the Sm-SEF7 treated type 2 rats (group 3) than in water treated control group (group 1). But there was no change in lipid level after 21 days fraction feeding on type 2 model rats. The results indicated that, nontoxic Sm-SEF7 fraction of Swietenia mahagoni seed possesses antidiabetic properties in type 2 diabetic model rats. It seems to act as an insulonomimetic and/or insulin sensitizing agent.