Introduction: Renal damage is a common clinical manifestation in diabetic patients. Therefore, nephroprotective effect is a desirable property for an antidiabetic agent. Natural compounds belonging to Terminalia phillyreifolia (TP) owing to their potent antioxidant and anti-inflammatory activity may prove to be such agents. Objectives: The objectives of the present study were to evaluate methanolic extract of TP bark for its antihyperglycemic, antioxidant and nephroprotective effect in streptozotocin (STZ) induced diabetes mellitus and nephropathy in rats. Materials and Methods: Diabetic male Wistar rats were divided into five groups; namely, normal control, disease control, standard (NPH insulin, subcutaneously), BE100 (bark extract 100 mg/kg, p.o.) and BE300 (bark extract 300 mg/kg, orally). Treatment was continued for 8 weeks. Plasma glucose levels, oxidative stress parameters, serum creatinine levels, blood urea nitrogen (BUN) levels, per day urine output, urinary protein excretion (UPE) and kidney hypertrophy index were determined at appropriate time points. Results: Untreated animals developed severe hyperglycemia and major disturbance in renal function. Rats in standard and BE treated groups had significantly lower plasma glucose levels and oxidative stress markers as compared to disease control animals. BE rats also exhibited nearly normal urine volumes indicating better glomerular filtration rate. They had lower urinary protein, serum creatinine, BUN levels and lower renal hypertrophy index as compared to untreated animals. Conclusion: TP Bark extract corrected the hyperglycaemia and exerted protective effect against diabetes induced renal damage in rats, which may be partly due to its anti-oxidant effect. Therefore, TP extract can be further evaluated as potential antidiabetic therapy