Diabetes mellitus is characterized by hyperglycaemia that results from defects in insulin secretion or insulin action and is accompanied by general disturbances metabolism. Psidium guajava (PG) leaf is known to have antidiabetic effects that include lowering of blood glucose. The aim of the study was to investigate the effect of PG leaf extract on tissue activity of glycogen synthase (GS) and glycogen phosphorylase (GP); tissue activity of hormone sensitive lipase (HSL); serum lipid profile; and serum enzyme biomarkers of tissue damage. Diabetes was induced in male Sprague-Dawley rats with a single dose of 40 mg/kg body weight streptozotocin. The aqueous extract of PG leaves was used to treat both normal and diabetic animals (400 mg/kg body weight) for 2 weeks while control animals were treated with the vehicle. At the end of the treatment period, blood, liver and adipose tissue samples were collected from the euthanized animals. The results show that PG extract significantly decreased (P < 0.05) HSL activity in adipose tissue and liver of diabetic animals which was accompanied by increased glycogen levels, reduced serum triglycerides, total cholesterol, LDL-cholesterol and increased HDL-cholesterol. This study demonstrates that P. guajava has significant anti-diabetic effects that include increased glycogen storage and reduced HSL activity in the liver and adipose tissue with an improved serum lipid profile.