Persistent hyperglycemia and elevated levels of free fatty acids (FFA) contribute to oxidative stress, a proximate cause for the onset and progression of diabetes and its complications. The present study was hypothesized to evaluate the anti-diabetic potential of Rosmarinic acid (RA) during high-fat diet (HFD)-streptozotocin (STZ)-induced type 2 Diabetes (T2D) in wistar albino rats. Oral administration of RA (100 mg/kg b.w) significantly (p < 0.05) increased the insulin sensitivity index (ISI0,120), while the levels of blood glucose, HbA1c, advanced glycation end products (AGE), TNF-α, IL-1β, IL 6, NO, p-JNK, P38 MAPK and NF-κB were significantly reduced, with a concomitant elevation in the plasma insulin levels in diabetic rats. Furthermore, RA treatment significantly (p < 0.05) reduced the levels of triglycerides, FFA and cholesterol in serum, and reduced the levels of lipid peroxides, AOPP's and protein carbonyls in the plasma and pancreas of diabetic rats. The diminished activities of pancreatic superoxide dismutase (SOD), catalase (CAT), glutathione peroxidase (GPx) and glutathione-S-transferase (GST) and the decreased levels of plasma ceruloplasmin, vitamin C, vitamin E and reduced glutathione (GSH) in diabetic rats were also significantly (p < 0.05) recovered upon RA treatment denoting its antioxidant potential which was confirmed by Nrf-2, hemeoxyenase (HO-1) levels. Histological, ultrastructural and immunohistochemical data demonstrate that oral administration of RA protects pancreatic β-cells from oxidative niche in HFD-STZ-induced experimental diabetes. Our findings suggest that the oral treatment with RA alleviates pancreatic β-cell dysfunction and glucolipotoxicity-mediated oxidative stress during HFD-STZ-induced T2DM, perhaps through its antioxidant potential.