Diabetes is a group of metabolic disorder effecting health of wide number of population and cause neuropsychological decline. In the present study, effect of AI leaves extract on neuropsychological behaviors was observed in diabetic rat's model. Rats were divided into 4 groups as control (saline treated healthy rats), positive control (pioglitazone treated diabetic rats), diabetic control (untreated diabetic rats) and AI leaves extract treated diabetic rats. Diabetes was induced by giving 35% fructose for 6 weeks and a single dose of Streptozotocin (40 mg/kg). After 3 weeks of treatment behavioral and biochemical analysis were done. Behavioral results revealed that induction of type 2 diabetes produced anxiety, depression, decreased motor activity and impaired recognition memory in rats. Treatment with AI leaves extract in diabetic rats significantly decreased anxiety, depression, increased motor activity, enhanced recognition memory. Biochemical investigation revealed that AI leaves extract treat diabetes via improving the levels of fasting insulin and HbA1c and a significant decrease in CK and SGPT levels were observed in AI leaves treated diabetic rats. So, AI besides treating diabetes, helps in lowering the risk of co-occurring diabetic diseases and found effective in lowering neuropsychological decline observed in type 2 diabetes.