Andrographis paniculata (Burm. f.) Nees is a plant that originates from India and grows widely to Southeast which used for several purposes mainly as treatment of diabetes mellitus so the aim of this study was evaluate andrographolide for its pancreatic effect in neonatal streptozotocin (STZ)-induced diabetic rats, a model of type 2 diabetic rats. Diabetic condition was induced with an intraperitoneal injection of 90 mg kg(-1) streptozotocin in two-day-old rats. After three months, the neonatal STZ-induced diabetic rats were treated with andrographolide or andrographolide-enriched extract of A. paniculata (AEEAP) for 8 consecutive days. Pancreatic effect was evaluated by estimating mainly the preprandial and postprandial blood glucose levels and other parameters such as morphology of pancreatic islet, beta cells density and morphology and immunohistochemically pancreatic insulin. Andrographolide significantly (p < 0.05) decreased the levels of blood glucose and improved diabetic rat islet and beta cells. However, AEEAP exhibited moderate hypoglycaemic effects on the blood glucose levels. Moderate changes in beta cells were observed after AEEAP treatment. They could restore decreasing of pancreatic insulin contents. Based on these results andrographolide and AEEAP exhibited pancreatic actions in neonatal STZ-induced diabetic rats. The activity of andrographolide was more effective than this of AEEAP.