Abstract: Background and Objective: The plant and microbial phytochemicals possessing many biological activities with less toxic effects. Hence, present research was aimed to identify phytochemicals in Penicillium species extract and their role in diabetic activity. Materials and Methods: The methanolic extract of endophytic fungi Penicillium species of Tabebuia argentea was used to analyse phytochemical constituents by Gas Chromatography Mass Spectrometry (GC-MS). The same extract was used to evaluate the in vitro anti-diabetic activity. The phytochemicals profile obtained from GC-MS was used for in silico anti-diabetic activity against 21 different diabetic proteins/enzymes and ADMET (Absorption, Dissolution, Metabolism, Excretion and Toxicity). The analysis of variance was used to determine the significance of difference between treatment groups two-way (ANOVA) followed by SPSS2 (MRX version). Results: The methanol extract of Penicillium species consisted of 18 different phytochemicals and they inhibited the activity of α-amylase, β-glucosidase and dipeptidyl peptidase IV at maximum level. Out of 18 phytochemicals, the octadecanoic acid methyl ester and 3 phthalates have shown more interaction with all the 21 diabetic proteins/enzymes tested. The octadecanoic acid has shown more interaction with 1dhk, 1nu6, 2wy1, 4y14, 3i2m, 3k35, 4j5t and 5td4. The di-isobutyl isophthalate, dioctyl phthalate and bis-2-ethylhexyl phthalate have shown high interaction with 1m1j, 1ogs and 4acd. The overall observation of present study showed that octadecanoic acid is responsible for inducing anti-diabetic activity and the compound has the ability to interact with all the diabetic proteins and inactivate their activity. The in silico investigation clearly indicates how tested compounds interact with different diabetic proteins/enzymes, their role was identified and they were non-toxic and non-carcinogens. Conclusion: The Penicillium species represented potent bioactive compounds in their extract and are responsible for significant in vitro and in silico anti-diabetic activity.