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Ethnopharmacological Relevance: β-Sitosterol is a plant derived compound similar to cholesterol structure and used in the treatment of hypercholesterolemia, prostate cancer, breast cancer and coronary artery disease. But no studies have been reported the effect of β-sitosterol on glucose homeostasis by sensitization of insulin resistance via enhanced protein expression of peroxisome proliferator-activated receptor γ (PPARγ) and glucose transporter 4 (GLUT4) in insulin dependent tissues of high fat diet and streptozotocin-induced diabetic rats., Materials and Methods: Type 2 diabetes was induced in male albino Wistar rats by feeding them with high fat diet comprising of 84.3% standard laboratory chow, 5% lard, 10% yolk powder, 0.2% cholesterol and 0.5% bile salt for 2 weeks. After 2 weeks, the animals were kept in an overnight fast and injected with low dose of streptozotocin (35 mg/kg, dissolved in 0.1 M sodium citrate buffer, pH 4.5). Analysis of blood glucose, insulin, hemoglobin and glycated hemoglobin were done by commercially available diagnostic kits. The PPARγ and GLUT4 were analyzed by western blotting using respective primary and secondary antibodies., Results: Upon administration of β-sitosterol at a dose of 15 mg/kg body weight per day to high fat diet and streptozotocin induced diabetic rats for 30 days significantly decreased the levels of plasma glucose, homeostatic model assessment of insulin resistance and glycosylated hemoglobin and increased the levels of insulin, hemoglobin and protein expression of PPARγ and GLUT4 in insulin dependent tissues. Furthermore, β-sitosterol administration prevented the body weight loss and excessive intake of food and water., Conclusion: These finding suggest that β-sitosterol can replace the commercial drugs which could lead to reduction in toxicity and side effect caused by the later as well as reduce the secondary complications.