The present study was designed to evaluate the antidiabetic and hypolipidemic effects of aqueous extract of Artemisia sieberi aerial part in normal and alloxan diabetic rats. Forty male Wister rats with body weight of 180-200 g divided into four groups two control and two experimental groups: Group 1-injected with physiological saline, group 2-received orally water extract of Artemisia sieberi (39 g kg-1 b.wt.) and served as control. Groups 3 and 4 including diabetic rats, group 3 received 10 mL kg-1 tap water and served as control and group 5 given orally water extract of Artemisia sieberi (0.39 g kg-1 b.wt.). At the end of the experimental period (14 days), animals in all four groups were fasted for 12 h and blood samples were taken for the determination of serum glucose total cholesterol, triglycerides, HDL cholesterol, LDL cholesterol and total cholesterol/HDL cholesterol (TC/HDL-C). The treatment was given for 2 weeks. After the treatment a significant reduction was observed in fasting serum glucose levels in the treated diabetic's rats. Artemisia sieberi treatment showed considerable lowering of serum total cholesterol, triglycerides, LDL cholesterol, TC/HDL-C and an increase in HDL cholesterol in the treated diabetic group. These results suggest that the oral administration of Artemisia sieberi aqueous extract of the aerial part possesses antidiabetic and hypolipidemic effects in alloxan-induced diabetic rats.