Many plants have been used for the treatment of diabetes mellitus in Jordanian system of medicine and in other ancient systems of the world. The present study is aimed to evaluate the potential mechanism of antidiabetic action of aqueous extract of Alkanna strigosa aerial part and its hypolipidemic effects in normal and alloxan-induced diabetic rats. This study was conducted on fifty experimental animals. Adult albino rats (Sprague-Dawely strain) weighing about 220 g each were used throughout the study. Fifty rats were randomly assigned to five experimental groups of 10 rats each: Group 1 -received normal saline (0.5 ml/kg), and serves as control. Group II -gavaged daily for thirty days with 1ml of the extract at doses of 400 mg/kg body wt and served as control. Group III -Untreated diabetic rats that received two doses of alloxan 150 mg/kg. Group IV -Treated diabetic rats for thirty consecutive days with 1 ml of the extract at a dose of 400 mg/kg body wt. Group V: Treated diabetic rats for thirty consecutive days with 14.2 mg/kg of metformin. Several hematological and biochemical parameters were assessed. It was found that the administration of aqueous extract of Alkanna strigosa produced significant reduction in blood glucose level in diabetic rats after thirty days of treatment. However, there was a significant (p < 0.05). Increase of insulin secretion. Also, the RBC and WBC count, PCV and neutrophil percentage decreased significantly (p < 0.05). This study indicated that the aqueous extract of Alkanna strigosa increased the RBC and WBC counts, PCV, ESR, and neutrophil percentage in diabetic rats. However, the WBC count of the extract -treated diabetic group was still lower than those of control values. Administration of the extract resulted in a significant reduction in the mean values of serum cholesterol, triglyceride, LDL-C, ESR, urea, uric acid, creatinine accompanied by an increase in the mean values of total protein, albumin, insulin, HDL-C, neutrophile count and PCV in diabetic rats. No significant changes in these parameters were found in the control group. Effects produced by this extract were closely similar to a standard antidiabetic drug, metformin. (p < 0.05) hypoglycemic effects in alloxan-induced diabetic rats, protection against body weight loss of diabetic animals and might alleviate diabetes-induced disturbances of some biochemical and hematological parameters. These results suggest that the oral administration of aqueous extract of the aerial part of Alkanna strigosa possesses antidiabetic and hypolipidemic effects in alloxan-induced diabetic rats.