This study was designed to investigate the antidiabetic property of Cinnamomum iners leaves which were used traditionally to combat diabetes. Firstly, the antidiabetic activity of petroleum ether, chloroform, methanol and water extract of C. iners leaves was evaluated. Next, the potential extract which was the methanol extract was fractionated to obtain ethyl acetate, n-butanol, chloroform and aqueous fraction. The active chloroform fraction was subjected to subfractionation process to obtain subfraction 1 (SF 1) and subfraction 2 (SF 2). Cinnamomum iners leaves active portion (methanol extract, chloroform fraction and subfraction 1) was standardized using cinnamic aldehyde. The antidiabetic activity of standardized C. iners leaves was assessed by using Intra-Peritoneal Glucose Tolerance Test (IPGTT). The antidiabetic mechanism of active portion of C. iners leaves were also determined by measuring glucose absorption from the intestine. This study showed significant glucose tolerance effect of active portion of C. iners leaf after repeated oral administration in STZ-induced diabetic rats. The antidiabetic mechanism of subfraction 1 and chloroform fraction of C. iners leaf is by inhibiting glucose absorption from intestine.