Aim of the study: Gymnema sylvestre (Asclepiadaceae) is emerging as a potential treatment for the management of diabetes. The leaves are used in herbal medicine preparations. The present study was carried out to isolate and identify the putative antidiabetic compound based on bioassay-guided fractionation. Materials and methods: An active compound dihydroxy gymnemic triacetate has been isolated from Gymnema sylvestre acetone extract and its optimum dose has been determined and patented. An optimum dose of dihydroxy gymnemic triacetate (20 mg/kg body weight) was orally administered for 45 days to streptozotocin diabetic rats for the assessment of plasma glucose, insulin, glycated hemoglobin (HbA1c), tissue glycogen, lipid parameters such as triglycerides, total cholesterol, LDL-cholesterol, HDL-cholesterol and activities of hepatic marker enzymes, such as aspartate aminotransferase (AST), alanine aminotransferase (ALT), alkaline phosphatase (ALP) and acid phosphatase (ACP) in normal and streptozotocin diabetic rats.Results: Dihydroxy gymnemic triacetate at 20 mg dose produced significant effects on all biochemical parameters studied compared to diabetic control group.Conclusions: These results indicate that dihydroxy gymnemic triacetate, the compound from Gymnema sylvestre, possessed hypoglycemic and hypolipidemic activity in long-term treatment and hence it could be used as a drug for treating diabetes. (C) 2009 Elsevier Ireland Ltd. All rights reserved.