An earlier anti-hyperglycemic study with serial crude extracts of Phaleria macrocarpa (PM) fruit indicated methanol extract (ME) as the most effective. In the present investigation, the methanol extract was further fractionated to obtain chloroform (CF), ethyl acetate (EAF), n-butanol (NBF) and aqueous (AF) fractions, which were tested for antidiabetic activity. The NBF reduced blood glucose (p < 0.05) 15 min after administration, in an intraperitoneal glucose tolerance test (IPGTT) similar to metformin. Moreover, it lowered blood glucose in diabetic rats by 66.67% (p < 0.05), similar to metformin (51.11%), glibenclamide (66.67%) and insulin (71.43%) after a 12-day treatment, hence considered to be the most active fraction. Further fractionation of NBF yielded sub-fractions I (SFI) and II (SFII), and only SFI lowered blood glucose (p < 0.05), in IPGTT similar to glibenclamide. The ME, NBF, and SFI correspondingly lowered plasma insulin (p < 0.05) and dose-dependently inhibited glucose transport across isolated rat jejunum implying an extra-pancreatic mechanism. Phytochemical screening showed the presence of flavonoids, terpenes and tannins, in ME, NBF and SFI, and LC-MS analyses revealed 9.52%, 33.30% and 22.50% mangiferin respectively. PM fruit possesses anti-hyperglycemic effect, exerted probably through extra-pancreatic action. Magniferin, contained therein may be responsible for this reported activity.