Background Diabetes mellitus is a metabolic disorder that affects the body’s ability to produce or use insulin. There is a continuous rise of this disease particularly in developing countries due to changes in life style and poverty among the people. In this study, antidiabetic activities of aqueous extract of Nelsonia canescens and its partitioned fractions in alloxan-induced diabetic rats were evaluated. Male albino rats were divided into 9 groups (diabetic and non-diabetic) of 5 rats each. Diabetes was induced by single intraperitoneal administration of alloxan (90 mg/kgbwt). The experimental design consists of a diabetic control group (untreated), a normal control group (1 mL saline), a standard diabetic drug (Glibenclamide; 5 mg/kgbwt), two doses (50 and 300 mg/kgbwt) of aqueous extract, ethyl acetate and methanol fractions of Nelsonia canescens were orally administered for a period 21 days. Blood glucose of the rats was monitored at 3-days intervals while biochemical and in vivo antioxidant assays of serum and liver were determined after 21 days. Results The hypoglycemic effect of the extract observed was in a dose dependent manner with a significant reduction (p < 0.05) of blood glucose in ethylaceate fraction > aqueous extract > methanol fraction compared with the diabetic control group. A significant difference (p < 0.05) in lipid profiles and serum enzyme activity of rats in the diabetic control group was observed compared with the extract and fraction treated groups. Conclusion The results suggest that the aqueous extract and fractions of N. canescens showed hypoglycemic and hypolipidemic potentials and significantly (p < 0.05) reduced the progression of oxidative stress.