The aim of the present study was to evaluate the protective effect of Gymnema montanum on red blood cell (RBC) membrane in diabetic rats during lipid peroxidation. Ethanol extract of G. montanum leaves (GLEt) was administered orally to alloxan-induced diabetic rats for 3 weeks, and the effects on blood glucose, insulin, lipid peroxidation markers, thiobarbituric acid reactive substances, hydroperoxides in plasma and antioxidant enzymes including superoxide dismutase, catalase and glutathione peroxidase activities in erythrocytes were studied. Administration of GLEt to diabetic animals at doses of 50, 100, and 200 mg/kg body weight lowered elevated blood glucose levels by 24, 35, and 66%, respectively, relative to untreated diabetic rats. In comparison, treatment with the known antidiabetic drug, glibenclamide (600 microg/kg body weight) decreased blood glucose concentrations by 51%. Plasma insulin concentrations were increased in the diabetic rat by 73% with GLEt (200 mg/kg body weight) and 45% with glibenclamide (600 microg/kg body weight). Although a significant decrease in the lipid peroxidation markers was observed in plasma on treatment with GLEt and glibenclamide, the RBC antioxidant levels were increased significantly in diabetic rats. Furthermore, erythrocytes from the GLEt-treated animals were found to be more resistant to H2O2-induced peroxidation than that of untreated diabetic animals. The chemical characterization of the polyphenolics of the extract showed the presence of gallic acid (5.29% w/w), resveratrol (2.2% w/w), and quercetin (16.6% w/w). The results of this study suggest that G. montanum may be useful for the control, management, and prevention of oxidative stress associated with diabetes.