Introduction: Diabetes is a metabolic disease with hyperglycemia, decrease in insulin secretion or de-sensitization of peripheral cells to insulin. Onosma is a species of Boraginaceae which although it is used in traditional medicine for its anti-oxidant, anti-inflammatory and antibiotic properties, data on its anti-diabetic effects are limited. This research has been designed to assess its' anti-diabetc, anti-neuropathy and anti-oxidative stress effects in an in-vivo model of diabetes. Materials and Methods: Hydroalcoholic extract was prepared from over-ground organs, (shoots and leaves) and underground organs (roots), and administered by gavage (50 mg/kg) for 3 weeks to mice in a streptozocin induced diabetic model. After the treatment period, blood glucose,  weight and neuropathy were determined and for positive control, metformin (50 mg/kg) was used. After removing the brain and liver of mice and homogenization of tissues, the MDA and Glutathione contents of the tissues have been assayed by a colorimetric method. Results: Results of this research show that hydroalcoholic extract of Onosma d. has anti-diabeti properties which have beneficial effects for some parameters such as hypoglycemia and reducing MDA, the effect of underground organs as roots extracts were better. However for increasing weight, diminishing neuropathy and increasing GSH contents, the effects of over-ground organs as leaves and shoots extracts were more significant. Conclusion: Results of this research indicate the anti-diabetic and anti-neuropathy properties of Onosma dichroanthum as a herbal medicine, related to its anti-oxidant abilities and limited side effects, can hence be used for treatment with other anti-diabetic drugs.