Background. Abrus precatorius is used in folk medicine across Afro-Asian regions of the world. Earlier, glucose lowering and pancreato-protective effects of Abrus precatorius leaf extract (APLE) was confirmed experimentally in STZ/nicotinamide-induced diabetic rats; however, the underlying mechanism of antidiabetic effect and pancreato-protection remained unknown. Objective. This study elucidated antidiabetic mechanisms and pancreato-protective effects of APLE in diabetic rats. Materials and Methods. APLE was prepared by ethanol/Soxhlet extraction method. Total phenols and flavonoids were quantified calorimetrically after initial phytochemical screening. Diabetes mellitus (DM) was established in adult Sprague-Dawley rats (weighing 120–180 g) of both sexes by daily sequential injection of nicotinamide (48 mg/kg; ip) and Alloxan (120 mg/kg; ip) over a period of 7 days. Except control rats which had fasting blood glucose (FBG) of 4.60 mmol/L, rats having stable FBG (16–21 mmol/L) 7 days post-nicotinamide/Alloxan injection were considered diabetic and were randomly reassigned to one of the following groups (model, APLE (100, 200, and 400 mg/kg, respectively; po) and metformin (300 mg/kg; po)) and treated daily for 18 days. Bodyweight and FBG were measured every 72 hours for 18 days. On day 18, rats were sacrificed under deep anesthesia; organs (kidney, liver, pancreas, and spleen) were isolated and weighed. Blood was collected for estimation of serum insulin, glucagon, and GLP-1 using a rat-specific ELISA kit. The pancreas was processed, sectioned, and H&E-stained for histological examination. Effect of APLE on enzymatic activity of alpha (α)-amylase and α-glucosidase was assessed. Antioxidant and free radical scavenging properties of APLE were assessed using standard methods. Results. APLE dose-dependently decreased the initial FBG by 68.67%, 31.07%, and 4.39% compared to model (4.34%) and metformin (43.63%). APLE (100 mg/kg) treatment restored weight loss relative to model. APLE increased serum insulin and GLP-1 but decreased serum glucagon relative to model. APLE increased both the number and median crosssectional area (×106μm2) of pancreatic islets compared to that of model. APLE produced concentration-dependent inhibition of α-amylase and α-glucosidase relative to acarbose. APLE concentration dependently scavenged DPPH and nitric oxide (NO) radicals and demonstrated increased ferric reducing antioxidant capacity (FRAC) relative to standards. Conclusion. Antidiabetic effect of APLE is mediated through modulation of insulin and GLP-1 inversely with glucagon, noncompetitive inhibition of α-amylase and α-glucosidase, free radical scavenging, and recovery of damaged/necro-apoptosized pancreatic β-cells.