Background: Diabetes mellitus is a metabolic disorder that causes millions of deaths throughout the world every year, and today also its incidence is on the increase. Many antidiabetic drugs are available in the pharmaceutical market, but drawbacks related to them had forced the researcher's attention to switch towards naturopathy. The study aimed to isolate and evaluate the antidiabetic principle from the mangrove plant Lumnitzera racemosa leaves. Materials and Methods: The active principle was isolated using column chromatography and identified with high-performance liquid chromatography, and further structure elucidation was done by FT-IR, LCMS, NMR, and elemental analysis. The antidiabetic activity of that isolated compound was monitored using in vitro alpha-amylase and alpha-glucosidase inhibition and in vivo STZ-induced diabetic rat models. Results: The isolated compound showed potent antidiabetic activity by inhibiting alpha-amylase and alpha-glucosidase with IC 50 values of 30.23 and 0.022 mg/ml, respectively. Furthermore, the isolated compound administration (250 and 500 mg/ml BW) in STZ-induced diabetic rats has exhibited a significant dose-dependent decrease in blood glucose levels. Besides this, the haematological findings, biochemical, and histopathology of the isolated compound showed comparable results to that of standard glibenclamide, indicating the protective role of the compound against any damage to the pancreas, liver and kidney. HPLC and different spectroscopic analyses revealed that the isolated compound is 4a-methyl-5-(6-methylhept-5-en-1-yl)octahydro-1H-cyclopenta[a] pyridazine, which belongs to the alkaloid class of the secondary metabolites. Conclusion: Data obtained states that the alkaloid isolated from L. racemosa leaves possess significant antidiabetic activity in both in vitro and in vivo models.