Oxidative stress-mediated damage to liver tissue underlies the pathological alterations in liver morphology and function that are observed in diabetes. We examined the effects of the antioxidant action of melatonin against necrosis-inducing DNA damage in hepatocytes of streptozotocin (STZ)-induced diabetic rats. Daily administration of melatonin (0.2 mg/kg) was initiated 3 days before diabetes induction and maintained for 4 weeks. Melatonin-treated diabetic rats exhibited improved markers of liver injury (P < 0.05), alkaline phosphatase, and alanine and aspartate aminotransferases. Melatonin prevented the diabetes-related morphological deterioration of hepatocytes, DNA damage (P < 0.05), and hepatocellular necrosis. The improvement was due to containment of the pronecrotic oxygen radical load, observed as inhibition (P < 0.05) of the diabetes-induced rise in lipid peroxidation and hydrogen peroxide increase in the liver. This was accompanied by improved necrotic markers of cellular damage: a significant reduction in cleavage of the DNA repair enzyme poly(ADP-ribose) polymerase 1 (PARP-1) into necrotic 55- and 62-kDa fragments, and inhibition of nucleus-to-cytoplasm translocation and accumulation in the serum of the high-mobility group box 1 (HMGB1) protein. We conclude that melatonin is hepatoprotective in diabetes. It reduces extensive DNA damage and resulting necrotic processes. Melatonin application could thus present a viable therapeutic option in the management of diabetes-induced liver injury.