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α-amylase inhibitor retards the liberation of glucose from dietary complex carbohydrates and delays the absorption of glucose. The purpose of the study was to isolate and select α-amylase inhibitor-producing endophytic actinomycetes from the leaves and stems of Leucas ciliata and Rauwolfia densiflora, two of the well-known medicinal plants used in the treatment for diabetes. Sterilized plant samples were inoculated on the actinomycete isolation agar medium containing 50 ppm cycloheximide and incubated for 4–8 weeks at room temperature. The actinomycetes were isolated on agar medium and identified on the basis of 16S rRNA sequences, the isolates exhibiting >99% similarities were submitted to NCBI, and gene accession numbers were obtained. They were inoculated to International Streptomyces Project 1 medium (ISP 1) for fermentation. The extracts obtained were tested for the anti-diabetic potential by the inhibition of alpha-amylase by colorimetric assay and glucose uptake in the porcine hemidiaphragm. Streptomyces longisporoflavus (JX965948) isolated from the stem fragments of L. ciliata exhibited alpha-amylase inhibitory activity (IC50 values = 162·3 ± 1·05 μg ml−1) in comparison with the standard Acarbose™ (IC50 value = 73·1 ± 1·12 μg ml−1). Extract of Streptomyces sp. (JQ926174) from R. densiflora indicated glucose uptake in the porcine hemidiaphragm. Results indicate for the first time the potential of endophytic streptomycete extracts with anti-diabetic activity.Significance and Impact of the Study: Endophytic actinomycetes were isolated from two medicinal species of the Western Ghats, a biodiversity ‘hotspot’ in southern India and screened for the anti-diabetic potential for inhibition of α-amylase and improved glucose uptake in the porcine hemidiaphragm. Results indicate the inhibition of α-amylase by Streptomyces longisporoflavus extract with IC50 values of 162·3 ± 1·05 μg ml−1 in comparison with the standard inhibitor Acarbose™ with IC50 value 73·1 ± 1·12 μg ml−1. Further, extract from Streptomyces sp. showed increased glucose uptake by hemidiaphragm. The present investigation implicates the potential of endophytic actinomycetes as sources of anti-diabetic agents.