Anti-diabetic and hypolipidemic effects of seed of Gossypium herbaceum L (GH) and its aqueous and ethanol extracts were investigated in alloxan-induced diabetic rabbits. Normal, Alloxan-induced diabetic and treated groups of rabbit were examined for their serum glucose, triglyceride, cholesterol, creatinine and urea levels. Water/food intake and toxic effect of test substances were also observed in treated rabbits. Effect of test agents on architecture of pancreatic β-cells was evaluated histopathologically in rabbits. GH powder, its aqueous (GHA) and ethanol (GHE) extract significantly (P<0.05) reduced normoglycemia, serum cholesterol, triglyceride and urea in a dose dependent order (200→300 mg/kg of body weight) in normal rabbits. GH and GHE ameliorated completely the Alloxan effect on serum levels of glucose, cholesterol, triglyceride, creatinine and urea in Alloxan-induced diabetic rabbits. GHA and Glimepiride (a reference drug) partially blocked such effect of the Alloxan in treated rabbits. Further GH, GHA and GHE did not cause any change in food/water intakes and on liver, spleen, kidney, lung and heart in treated rabbits. Phytochemical study of GH and its extracts revealed the presence of flavonoids and phenolic compounds. Histopathological examination showed the protective effect of GH, GHA and GHE against Alloxan-induced destruction of β-cells of pancreas in diabetic rabbits. Data indicated that GH and its aqueous and ethanol extracts have promising anti-diabetic and hypolipidemic effects. GH and GHE could be effective tool against the development, progression and complication of Diabetes mellitus.