Background & Objectives: The present study was aimed to evaluate the antihyperglycaemic and antioxidant effect of Hypnea musciformis (red algae) in alloxan-induced diabetes in Wistar rats. Methods: Diabetes mellitus was induced by intraperitoneal injection of alloxan monohydrate (150 mg/kg). After induction of diabetes the rats were treated with aqueous extract of Hypnea musciformis (100 and 200 mg/kg) daily for a period of 21 days. After the treatment period the rats were sacrificed by cervical decapitation and various biochemical estimations were performed. Results: Treatment with Hypnea musciformis to diabetic rats for a period of 21 days significantly decreased the levels of blood glucose and thiobarbituric acid reactive substances with significant increase in the levels of plasma insulin and antioxidants. Interpretation & Conclusion: Results of our study suggests that aqueous extract of Hypnea musciformis possesses antihyperglycaemic and antioxidants activities in alloxan-induced diabetic rats. © 2009 Elsevier B.V., All rights reserved.