Memory impairment induced by streptozotocin in rats is a consequence of changes in CNS that are secondary to chronic hyperglycemia, impaired oxidative stress, cholinergic dysfunction, and changes in glucagon-like peptide (GLP). Treatment with antihyperglycemics, antioxidants, and cholinergic agonists are reported to produce beneficial effect in this model. Berberine, an isoquinoline alkaloid is reported to exhibit anti-diabetic and antioxidant effect, acetylcholinesterase (AChE) inhibitor, and increases GLP release. However, no report is available on influence of berberine on streptozotocin-induced memory impairment. Therefore, we tested its influence against cognitive dysfunction in streptozotocin-induced diabetic rats using Morris water maze paradigm. Lipid peroxidation and glutathione levels as parameters of oxidative stress and choline esterase (ChE) activity as marker of cholinergic function were assessed in the cerebral cortex and hippocampus. Thirty days after diabetes induction rats showed a severe deficit in learning and memory associated with increased lipid peroxidation, decreased reduced glutathione, and elevated ChE activity. In contrast, chronic treatment with berberine (25-100mg/kg, p.o., twice daily, 30 days) improved cognitive performance, lowered hyperglycemia, oxidative stress, and ChE activity in diabetic rats. In another set of experiment, berberine (100mg/kg) treatment during training trials also improved learning and memory, lowered hyperglycemia, oxidative stress, and ChE activity. Chronic treatment (30 days) with vitamin C or metformin, and donepezil during training trials also improved diabetes-induced memory impairment and reduced oxidative stress and/or choline esterase activity. In conclusion, the present study demonstrates treatment with berberine prevents the changes in oxidative stress and ChE activity, and consequently memory impairment in diabetic rats.