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Cinnamomum zeylanicum (CZ) has been involved in extensive research for its hypoglycaemic, hypolipidemic, anti-oxidant, anti-inflammatory and anti-obesity effects. Evidence from in-vitro, in-vivo and clinical trials have manifested its potential value for the treatment of type 2 diabetes mellitus and its complications. This review article highlights the mechanism of action, pharmacological studies, safety studies and drug interactions of CZ on type 2 diabetes which also includes different supplement doses, duration, mode of administration and baseline body mass index. A database search was conducted using the databases: PubMed, Clinical Key, Google Scholar and Science Direct. A systematic review of studies examining the effects of CZ extracts was done. In vitro CZ revealed a potential for reducing the emergence of foam cells and lipid accumulation on vascular smooth muscle cells, preventing hepatic fat accumulation and cessation of the anabolic pathway of fatty acid esterification. The beneficial effects of CZ in animal studies include reduction of serum TG, TC, and LDL-c with increase in HDL-c in a dose-dependent manner and at higher doses over a short duration or at lower doses over a long duration. It also showed in human studies decline in TC, TG, LDL-c with rise in HDL-c in association with baseline BMI (Body mass index) and in a dose-dependent manner, reduction in BMI and more improved profiles when taking capsules in comparison to infusions.