Monolluma quadrangulais a succulent bush traditionally used to treat diabetes and peptic ulcer. The present study aimed to investigate the effect ofM. quadrangulahydroethanolic extract on glucose tolerance, insulin sensitivity, glucose metabolizing enzymes, lipid profile, and adiponectin expression in type 2 diabetic rats. In addition, the study evaluated the antioxidant and anti-inflammatory activities of theM. quadrangulaextract. Type 2 diabetes was induced by feeding rats a high-fat diet (HFD) for 8 weeks followed by 30 mg/kg streptozotocin (STZ). Diabetic rats received 300 or 600 mg/kgM. quadrangulaextract for 4 weeks. HFD/STZ diabetic rats showed impaired glucose tolerance, reduced insulin secretion, and insulin resistance. HFD and STZ induced a significant increase in serum cholesterol, triglycerides and proinflammatory cytokines, and liver lipid peroxidation. Treatment withM. quadrangulaextract ameliorated these metabolic disturbances and increased liver glycogen, hexokinase activity, and antioxidants.M. quadranguladeclined the activity of liver glucose-6-phosphatase and fructose-1,6-biphosphatase. In addition,M. quadrangulaextract increased serum adiponectin levels and hepatic adiponectin expression in HFD/STZ diabetic rats. In conclusion,M. quadrangulaexerts antidiabetic effect mediatedviaameliorating glucose tolerance, insulin sensitivity, glucose metabolizing enzymes, and antioxidant defenses. Increased adiponectin levels and expression seems to mediate, at least in part, the antidiabetic effect ofM. quadrangula.