Diabetes is a chronic, metabolic disease characterized by elevated levels of blood glucose, which over time leads to serious damage to the heart, blood vessels, eyes, kidneys and nerves. This present study investigated the potential of Pterocarpus erinaceus aqueous stem bark extract to prevent oxidative kidney damage in diabetic rats. Thirty six (36) male wistar rats of 100 to 200g were used. The rats were divided into six groups (A-F). Diabetes mellitus was induced in groups B-F by injecting alloxan at the dose of 150 mg/kg body weight. After 72hours, diabetes was confirmed. Vitamin C 25 mg/kg b.wt was used as standard treatment for group C and aqueous extract of Pterocarpus erinaceus stem bark at doses of 100, 200 and 400 mg/kg b.wt were administered to groups D, E and F respectively. All treatments were given orally, daily for 14 days. Phytochemical screening of the extract, Blood glucose level and oral glucose tolerance test were determined. At the end of the experiment, the serum, kidney tissue and kidney homogenate were obtained for the determination of kidney function parameters, histology, lipid peroxidation, antioxidant and inflammation markers. Phytochemical results shows the presence of phenols, tannins, saponins, alkaloids, glycosides, cardiac glycosides and flavonoides. Diabetic rats administered with Pterocarpus erinaceus aqueous stem bark extract showed significant (P<0.05) decrease in, blood glucose, creatinine, blood urea nitrogen (BUN), potassium, MDA, TNF-alpha, IL-6 and TGF-β when compared with diabetic control rats. Also a non significant (P>0.05) decrease in uric acid, albumin, and an increase in sodium, GSH when compared with the diabetic control group. A significant (P<0.05) increase was observed in SOD, CAT, GPx, and GST when compared with diabetic control rats. The kidney histology shows well protected kidney. These results obtained shows that aqueous extract of Pterocarpus erinaceus stem bark exhibited significant antihyperglycemic, improvement in kidney function, antioxidant and anti inflammatory markers and prevented kidney tissue damage in alloxan-induced diabetic rats. This might be useful in the management diabetes mellitus patients.