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Introduction and Aim: Coconut palm sugar (CPS) is a functional food comprising unique phytonutrients such as polyphenolics, minerals, inulin, etc., and has a low glycemic index (GI). Based on its distinctive biochemical composition, it was hypothesized that CPS would provide a glucose homeostatic effect. We investigated the effects of CPS oral administration in Wistar rats with streptozotocin-induced diabetes.   Materials and Methods: Diabetic Wistar rats were administered with different doses of CPS (200,400 and 800 mg/Kg body weight) and standard gliclazide (5 mg/Kg b.w.) for 28 days. Biochemical estimations for fasting blood glucose, lipid profile and  antioxidant status were performed.   Results: Treatment with CPS significantly (P 0.001) decreased the plasma glucose levels at 120 min after glucose load. Serum blood glucose, hepatic enzymes (alanine transaminase (ALT), aspartate transaminase (AST), alkaline phosphatase (AP)), total cholesterol (TC), total triglycerides (TG), and low-density lipoprotein (LDL) levels were also decreased. However, levels of total serum protein and high-density lipoprotein (HDL) increased in a significant manner. Pancreatic enzymatic antioxidant levels were restored, and lipid peroxidation was decreased by CPS.   Conclusion: CPS showed quite a few health benefits in diabetic rats by bringing back the glucose and lipid homeostasis to normal and yielded favorable outcomes in case of oxidative stress.