Currently available therapeutic options for non-insulin-dependent diabetes mellitus, such as dietary modification, oral hypoglycemics, and insulin, have limitations of their own. Many natural products and herbal medicines have been recommended for the treatment of diabetes. The present paper reviews medicinal plants that have shown experimental or clinical antidiabetic activity and that have been used in traditional systems of medicine; the review also covers natural products (active natural components and crude extracts) isolated from the medicinal plants and reported during 2001 to 2005. Many kinds of natural products, such as terpenoids, alkaloids, flavonoids, phenolics, and some others, have shown antidiabetic potential. Particularly, schulzeines A, B, and C, radicamines A and B, 2,5-imino-1,2,5-trideoxy-L-glucitol, beta-homofuconojirimycin, myrciacitrin IV, dehydrotrametenolic acid, corosolic acid (Glucosol), 4-(alpha-rhamnopyranosyl)ellagic acid, and 1,2,3,4,6-pentagalloylglucose have shown significant antidiabetic activities. Among active medicinal herbs, Momordica charantia L. (Cucurbitaceae), Pterocarpus marsupium Roxb. (Leguminoceae), and Trigonella foenum graecum L. (Leguminosae) have been reported as beneficial for treatment of type 2 diabetes.