Regardless of socioeconomic or demographic background, the prevalence of type 2 diabetes mellitus, which affects more than half a billion people worldwide, has been steadily increasing over time. The health, emotional, sociological, and economic well-being of people would suffer if this number is not successfully handled. The liver is one of the key organs accountable for sustaining metabolic balance. Elevated levels of reactive oxygen species inhibit the recruitment and activation of IRS-1, IRS-2, and PI3K-Akt downstream signaling cascade. These signaling mechanisms reduce hepatic glucose absorption and glycogenesis while increasing hepatic glucose output and glycogenolysis. In our work, an analysis of the molecular mechanism of Carica papaya in mitigating hepatic insulin resistance in vivo and in silico was carried out. The gluconeogenic enzymes, glycolytic enzymes, hepatic glycogen tissue concentration, oxidative stress markers, enzymatic antioxidants, protein expression of IRS-2, PI3K, SREBP-1C, and GLUT-2 were evaluated in the liver tissues of high-fat-diet streptozotocin-induced type 2 diabetic rats using q-RT-PCR as well as immunohistochemistry and histopathology. Upon treatment, C. papaya restored the protein and gene expression in the liver. In the docking analysis, quercetin, kaempferol, caffeic acid, and p-coumaric acid present in the extract were found to have high binding affinities against IRS-2, PI3K, SREBP-1c, and GLUT-2, which may have contributed much to the antidiabetic property of C. papaya. Thus, C. papaya was capable of restoring the altered levels in the hepatic tissues of T2DM rats, reversing hepatic insulin resistance.