Abstract. In the current study, antidiabetic activity and toxic effects of zinc oxide nanoparticles (ZnO) were investigated in diabetic rats compared to zinc sulfate (ZnSO 4 ) with particular emphasis on oxidative stress parameters. One hundred and twenty male Wistar rats were divided into two healthy and diabetic groups, randomly. Each major group was further subdivided into five subgroups and then orally supplemented with various doses of ZnO (1, 3, and 10 mg/kg) and ZnSO 4 (30 mg/kg) for 56 consecutive days. ZnO showed greater antidiabetic activity compared to ZnSO 4 evidenced by improved glucose disposal, insulin levels, and zinc status. The altered activities of erythrocyte antioxidant enzymes as well as raised levels of lipid peroxidation and a marked reduction of total antioxidant capacity were observed in rats receiving ZnO. ZnO nanoparticles acted as a potent antidiabetic agent, however, severely elicited oxidative stress particularly at higher doses.