Present study was aimed to isolate and evaluate the antidiabetic activity of phytoconstituents from fruit rinds of Punica granatum. With the above objectives Valoneic acid dilactone (VAD) was isolated from methanolic fruit rind extracts of Punica granatum (MEPG) and confirmed by 1H-NMR, 13C-NMR, and mass spectral data. Antidiabetic activity was evaluated by Aldose reductase, α-amylase and PTP1B inhibition assays in in vitro and Alloxan-induced diabetes in rats was used as an in vivo model. In bioactivity studies, MEPG and VAD have showed potent antidiabetic activity in α-amylase, aldose reductase, and PTP1B inhibition assays with IC50 values of 1.02, 2.050, 26.25 μg/mL and 0.284, 0.788, 12.41 μg/mL, respectively. Furthermore, in alloxan-induced diabetes model MEPG (200 and 400 mg/kg, p.o.) and VAD (10, 25, and 50 mg/kg, p.o.) have showed significant and dose dependent antidiabetic activity by maintaining the blood glucose levels within the normal limits. Inline with the biochemical findings histopathology of MEPG (200 and 400 mg/kg, p.o.), VAD (10, 25, and 50 mg/kg, p.o.), and glibenclamide (10 mg/kg, p.o.) treated animals showed significant protection against alloxan-induced pancreatic tissue damage. These findings suggest that MEPG and VAD possess significant antidiabetic activity in both in vitro and in vivo models.