The present study was undertaken to explore the possible anti-diabetic mechanism(s) of Emblica officinalis (EO) and its active constituent, ellagic acid (EA), in vitro and in vivo. Treatment with EO extract resulted in a significant decrease in the fasting blood glucose in a dose- and time-dependent manner in the diabetic rats. It significantly increased serum insulin in the diabetic rats in a dose-dependent manner. Insulin-to-glucose ratio was also increased by EO treatment. Immunostaining of pancreas showed that EO250 increased β-cell size, but EO500 increased β-cells number in diabetic rats. EO significantly increased plasma total antioxidants and liver GSH and decreased liver TBARS. EA stimulated glucose-stimulated insulin secretion from isolated islets and decreased glucose intolerance in diabetic rats. Ellagic acid in EO exerts anti-diabetic activity through the action on β-cells of pancreas that stimulates insulin secretion and decreases glucose intolerance.