1. The efficacy of green tea extract (GTE) on serum and cardiac lipids was investigated in streptozotocin (STZ)-diabetic rats. 2. Diabetes was induced in rats by a single intraperitoneal injection of STZ (60 mg/kg bodyweight). Six weeks after the induction of diabetes, GTE was administered orally for 4 weeks (300 mg/kg bodyweight daily). Bodyweight, heart weight, heart weight : bodyweight ratio, blood glucose, serum and cardiac lipids were determined in experimental rats. 3. In diabetic rats, there was a significant decrease in bodyweight with an increase in heart weight : bodyweight ratio and blood glucose. Diabetic rats had significantly increased serum levels of cholesterol, triglycerides, free fatty acids and low-density lipoprotein-cholesterol (LDL-C) and decreased levels of high-density lipoprotein-cholesterol (HDL-C). In the hearts of diabetic rats, there was a significant increase in cholesterol, triglycerides and free fatty acids levels, with an increase in lipoprotein lipase activity. 4. The administration of GTE to diabetic rats resulted in significant recovery in bodyweight, heart weight : bodyweight ratio and blood glucose levels. The administration of GTE reduced cholesterol, triglyceride, free fatty acid and LDL-C levels, and increased HDL-C levels, in the serum of diabetic rats. In addition, GTE decreased cholesterol, triglyceride, free fatty acids levels and lipoprotein lipase activity in the myocardium of diabetic rats. These beneficial effects of GTE are ascribed to its antihyperglycaemic and hypolipidaemic activity. In conclusion, green tea can reduce the risk of cardiovascular disease in diabetes with a significant improvement in lipid metabolism.