Enicostemma littorale (EL) Blume is one of the herbs widely used for treating and alleviating the effects of both type I and type II diabetes. However, lack of understanding of mechanism precludes the use of the herb and its molecules. In this study, we attempt to unravel the molecular mechanism of action of swertiamarin, a compound isolated form EL, by comparing its molecular effects with those of aqueous EL extract in alleviating the insulin resistance in type II diabetes. We further investigated hypolipidemic and insulin sensitizing effect of swertiamarin in experimentally induced noninsulin dependent diabetes mellitus (NIDDM) in rats. Swertiamarin (50 mg/kg) and aqueous extract (15 grams dried plant equivalent extract/kg) were administered to rats orally for 40 days and tight regulation of serum glucose, insulin, and lipid profile was found in both groups. Their mode of action was by restoring G6Pase and HMG-CoA reductase activities to normal levels and restoring normal transcriptional levels of PEPCK, GK, Glut 2, PPAR-γ, leptin, adiponectin, LPL, SREBP-1c, and Glut 4 genes. This suggests that both treatments increased insulin sensitivity and regulated carbohydrate and fat metabolism. This is the first report on the role of SM in regulating the PPARγ-mediated regulation of candidate genes involved in metabolism in peripheral tissues in vivo.