Abstract: Adequate characterization of hypoglycemic effect of ethanolic saffron extract has not been yet done, though the activity has been reported. The scientific evaluation of its hypoglycemic activity was, therefore, explored and compared with the effect of a standard hypoglycemic drug, tolbutamide. In this study, we also report on alteration in patterns of pancreatic islet cells using histopathology and immunohistochemistry of alloxanized diabetic rats treated with ethanolic saffron extract. The ethanolic extract of Crocus sativus L. stigma was administered orally and intraperitoneally at different doses (20, 40 and 80 mg kg-1) to normal rats for finding the more effective hypoglycemic dose and administration route. Acute hypoglycemic effects produced by more effective dose of ethanolic saffron extract on the Fasting Blood Glucose (FBG) levels and effects of the same dose of ethanolic saffron extract on the FBG and plasma insulin levels in alloxanized Mild Diabetic (MD) and Severely Diabetic (SD) rats were assayed. Histopathological and immunohistochemical studies were also carried out on pancreatic islet cells of control and diabetic rats. The dose of 40 mg kg-1 was found to be more effective dose in intraperitoneally (i.p.) route for decreasing Blood Glucose Level (BGL). The extract administered by i.p. route at more effective dose showed an acute hypoglycemic effect in MD and SD rats. Treatment of MD and SD rats for 14 days with the more effective dose significantly reduced the FBG levels in these animals (41.4% MD, 30.7% SD). Serum insulin level showed significant increase in diabetic rats (33.3% MD, 27.3% SD) after 14 days. The histopathological studies of pancreas in ethanolic extract treated diabetic groups showed a reversed damage caused by alloxan to the pancreatic islets as almost normal appearance. In addition, diabetic (MD and SD) rats showed obvious decreases in insulin immunoreactivity and the number of β-cells in pancreas, but the pancreas of extract-treated diabetic rats was improved and the number of immunoreactive β-cells was significantly increased. The control group given saffron extract was not different from the other intact control group considering the insulin immunoreactivity in β-cells. The findings of present study indicate the hypoglycemic and potential antihyperglycemic nature of the extract, helping in regeneration of damaged pancreas in experimental diabetes. Thus, after randomized clinical trials, saffron extract may be implicated as a preventive or therapeutic agent against diabetes mellitus.