Several medicinal plants have anti-diabetic properties and can be considered as an alternative therapy because of their actions which are like those of conventional antidiabetic drugs. In this study, we investigated Myrothamnus flabellifolius (MF) ethanol: water (70:30) extract for its possible anti-diabetic potential in streptozotocin-high energy diet (STZ-HED) induced type 2 diabetes mellitus (T2DM) rats and its possible mechanisms of action. Diabetic rats were divided into MF-50, MF-100, MF200, MF-300, MF400, and Metformin (MET)-500 groups, where the numbers represent doses in mg.kg.bw that were administered to the groups. Normal (NC) and diabetic (DC) controls were administered distilled water. The animals had their fasting blood glucose levels and body weights determined weekly for 21 days. Blood samples, liver, pancreas, and muscle were collected and used for biochemical and histological examination. Our study showed that MF extract lowered glucose levels, body weight, glycated hemoglobin, thiobarbituric acid reactive substances, serum glutamate pyruvate transaminase, serum glutamate oxaloacetate transaminase, Homeostatic model assessment of insulin resistance, and alkaline phosphatase (p<0.05; p<0.01) in T2DM. While adiponectin, catalase, leptin, lipid profile, insulin Homeostatic model of assessment of β cell function, and superoxide dismutase levels were elevated (p<0.05; p<0.01). Furthermore, MF extract preserved both the liver and the islets structure of T2DM rats and enhanced muscle glucose transporter 4 (GLUT 4) expression. M. flabellifolius extract normalized blood glucose and body weight in T2DM. Further investigations are needed to explore other possible mechanisms of action and clinical potential of MF extracts.