Diabetes mellitus is a common but serious metabolic disorder associated with many functional and structural complications. Glucose metabolism is disturbed due to an absolute or relative insulin deficiency. The experiment was carried out to determine the effect of melatonin on blood glucose and insulin concentrations, and histopathology of pancreatic β-cells in streptozotocin (STZ)-induced diabetic rats. The rats were randomly allocated into one of the four experimental groups: group A (control), group B (diabetic untreated), group C (diabetic treated with melatonin for 6 weeks) and group D (diabetic treated with melatonin for 8 weeks); each group contained ten animals. Diabetes was induced in B, C and D groups by a single intraperitoneal (i.p.) injection of STZ (50 mg/kg, freshly dissolved in 5 mmol/l citrate buffer, pH 4.5). The rats in melatonin-treated groups were subjected to the daily i.p injection of 10 mg kg-1 of melatonin for 6 or 8 weeks starting the day after STZ injection. Control and diabetic untreated rats were injected with the same volume of isotonic NaCl as the melatonin treated groups. Almost all insulin-positive β-cells were degranulated, degenerated or necrotic in the STZ-treated rats leading to decrease in insulin secretion and an increase in blood glucose concentration. Melatonin treatment caused a sharp decrease in the elevated serum glucose, a slight increase in the lowered serum insulin concentrations and small partial regeneration/proliferation of β-cells of islets. It is concluded that the hypoglycemic action of melatonin could be partly due to small amelioration in the β-cells of pancreatic islets causing a slight increase in insulin secretion, it is mostly due to the extrapancreatic actions of the melatonin.