Melatonin, “synchronizer of the biological clock” is major hormones secreted from the pineal gland have various therapeutic effects. The present study was designed to explore the modulatory effect of melatonin on antioxidant status, glucose and lipid metabolism in streptozotocin (STZ) induced diabetic rats. Male Wistar rats weighing 180-200 g were made diabetic by administration of streptozotocin (STZ) (40 mg/kg body weight) intraperitoneally. Melatonin was administered intraperitoneally at a dose of 2 mg/kg body weight to STZ-induced diabetic rats for 30 days. Body weight, blood glucose, carbohydrate metabolic enzyme, lipid profile, antioxidant and lipid peroxidation status were assessed. The level of the blood glucose, carbohydrate metabolic enzymes (glucose-6-phosphatase and fructose-1,6-bisphosphatase) and lipid peroxidative marker (TBARS) were increased in STZ induced diabetic rats while the melatonin treatment revert back to the near normal condition. In contrast, administered melatonin resulted in an increased in body weight and insulin secretion in diabetic rats. The enzymatic antioxidants (SOD, CAT and GPX) and non-enzymatic antioxidants (GSH, vitamin C and vitamin E) were also increased by melatonin treatment. The cholesterol and phospholipids which were elevated in diabetic rats were normalized by the melatonin administration. Hence these findings indicate that melatonin protects against STZ induced oxidative stress and thus explain its use in treatment of diabetes by modulating lipid and glucose metabolism.