Diabetes is a common condition that can contribute to illness, disability and early death world-wide. In an attempt to find remedy to this disease, the hypoglycemic effects of whole and frac-tionated neem seed oil on alloxan-induced diabetic rabbits were investigated. Oil from the neem seed was soxlet-extracted and some physicochemical properties determined. The whole neem seed oil had an acid value of 4.56�0.11, saponification value of 191.25�0.84, a pH of 4.85�0.15, a refractive index of 1.4653 at 29oC, a density of 0.9048 at 29oC. On fractionation of the whole neem seed oil, the acidic, basic and neutral portion obtained had pH values of 4.35�0.10, 8.50 �0.24, 7.75�0.01,respectively. IRspectrophotometric analysis suggests the presence of �OH, -C=O, -CH3. Rf values obtained from TLC analysis indicates a close relation in chemical compo-nents between the whole oil and acidic fraction. On administration of these oils to alloxan-induced diabetic rabbits (2.5 ml/kg p.o.), the whole oil and the acidic portion of oil had very sig-nificant (P<0.001) hypoglycaemic effect, the basic portionhad a significant effect (P<0.01) whereas the neutral portion had no significant effect (P>0.05) after five days of treatment. The data suggests that the whole neem seed oil and the acidic portion of the neem seed oil could be of benefit in controlling the blood sugar in subjects presenting with diabetes mellitus.