Many traditional systems of medicines employ herbal drugs for the hepatoprotection. Aim of the study was designed to evaluate the hepatoprotective potential of ‘ethanolic extract of Aquilaria agallocha (沉 香Chen Xiang) leaves' (AAE) against paracetamol (PCM) induced hepatotoxicity in SD rats. Group I animals were treated with 1% CMC for 8 days. Group II, III, IV and V animals were first treated with ‘1% CMC’ 1 ml/kg/day, AAE 200 mg/kg/day, AAE 400 mg/kg/day and silymarin 100 mg/kg/day respectively for 7 days and then, orally administered with PCM 3 g/kg b. wt. on 8th day in a single dose. 24 h after the last dosing by PCM, the blood was obtained through the retro-orbital plexus under light anesthesia and the animals were sacrificed. Hepatoprotective potential was assessed by various biochemical parameters such as ALT, AST, ALP, LDH, bilirubin, cholesterol, TP and ALB. Group IV rats showed significant (p < 0.01) decrease in ALT, AST, ALP, LDH, cholesterol, bilirubin, liver wt. and relative liver wt. levels while significant (p < 0.01) increase in final b. wt., TP and ALB levels as compared to group II rats. Hepatoprotective potential of AAE 400 mg/kg/day was comparable to that of standard drug silymarin 100 mg/kg/day. Results of the study were well supported by the histopathological observations. This study confirms that AAE possesses hepatoprotective potential comparable to that of standard drug silymarin as it exhibited comparable protective potential against PCM induced hepatotoxicity in SD rats.