Aims. To evaluate the effect of Punica granatum (Pg) rind extract and its spray dried biopolymeric dispersions with casein (F1) or chitosan (F2) against Diabetes mellitus (DM) and diabetic neuropathy (DN). Methods. We measured the acute (6 h) and subacute (8 days) effect of various doses of Pg, F1, and F2 and the active compounds on alloxan-induced DM mouse model. We evaluated DN utilizing latency tests for longer period of time (8 weeks). In addition, the in vivo antioxidant activity was assessed utilizing serum catalase level. Results. The results proved that the highest dose levels of Pg extract, F1, F2 exerted remarkable hypoglycemic activity with 48, 52, and 40% drop in the mice glucose levels after 6 hours, respectively. The tested compounds also improved peripheral nerve function as observed from the latency tests. Bioguided fractionation suggested that gallic acid (GA) was Pg main active ingredient responsible for its actions. Conclusion. Pg extract, F1, F2, and GA could be considered as a new therapeutic potential for the amelioration of diabetic neuropathic pain and the observed in vivo antioxidant potential may be involved in its antinociceptive effect. It is highly significant to pay attention to Pg and GA for amelioration and control of DM and its complications.