Hyperlipidaemia is an associated complication of diabetes mellitus. We recently reported that tetrahydrocurcumin lowered the blood glucose in diabetic rats. In the present study, we have investigated the effect of tetrahydrocurcumin, one of the active metabolites of curcumin on lipid profile and lipid peroxidation in streptozotocin-nicotinamide-induced diabetic rats. Tetrahydrocurcumin 80 mg/kg body weight was administered orally to diabetic rats for 45 days, resulted a significant reduction in blood glucose and significant increase in plasma insulin in diabetic rats, which proved its antidiabetic effect. Tetrahydrocurcumin also caused a significant reduction in lipid peroxidation (thiobarbituric acid reactive substances and hydroperoxides) and lipids (cholesterol, triglycerides, free fatty acids and phospholipids) in serum and tissues, suggesting its role in protection against lipid peroxidation and its antihyperlipidemic effect. Tetrahydrocurcumin showed a better effect when compared with curcumin. Results of the present study indicate that tetrahydrocurcumin showed antihyperlipidaemic effect in addtion to its antidiabetic effect in type 2 diabetic rats.