Objective: To evaluate the fasting serum glucose (FSG) lowering potential of different fractions (C & D) and subfraction (D1 & D2) from aqueous extract of Aloe vera leaf on normal and alloxan induced type 2 diabetic rats. Methods: Two fractions (C & D) obtained by common chemical treatment of the aqueous extract of Aleo vera leaf and subfraction (D1 & D2) from fraction D were administered to the alloxan induced (150mg/kg i.p.) diabetic rats. The FSG lowering capacity, of different fractions and subfractions, was then evaluated in terms of percentage reduction in blood glucose level. Results: Oral administration of fractions C & D and subfraction D1 & D2 for 15 days led significant (P<0.05) reduction to the elevated FSG level of alloxan induced diabetic rats. Percentage reduction in blood glucose level and comparison with standard drug glibenclamide suggest the superiority of fraction D and subfraction D1 in hypoglycaemic potential. Conclusions:The results suggest that fraction D and subfraction D1 from aqueous extracts of Aloe vera leaf possesses the maximum FSG lowering capacity and further investigation is required for determination of anti-diabetic principal(s) and exact mechanism of their hypoglycaemic action.