Diabetes mellitus is a metabolic disorder characterized by high blood glucose level. Current study was designed to evaluate the effect of polyherbal formulation consisting of Swertia chirata (Chirata), Bunium persicum (Kala zeera), Artemisia absinthium (Afsanteen boti), Gymnema sylvestra (Ghurmar boti), Caesalpinia bonduc (kranjwa magz), Citrullus colocynthis (Kortumma), Sphaeranthus indicus (Mundi boti), and Cuminum cyminum (Safeed zeera) in alloxan induced diabetic rats. Qualitative phytochemical analysis, mineral analysis, proximate analysis and DPPH assay were performed for standardization of polyherbal formulation. Acute toxicity testing was also performed in order to adjust the dosage regimen. Sampling for different parameters was done at 0, 4th and 8th week of experiment to evaluate the effect of polyherbal formulation on diabetic rats through biochemical, antioxidant, histopathological and gene expression analysis. The effects of herbal formulation on different genes like Pdx-1, Ins-1 and IGF-1 involved in insulin signaling and Traf-4 and Mapk-8 involved in MAPK downstream c-Jun N terminal kinase (JNK) cascade were investigated by quantitative polymerase chain reaction (qRT-PCR) analysis to assess the underlying molecular mechanism of action of herbal formulation. The data was analyzed through analysis of variance (ANOVA). Based on significant results of ANOVA, DMR (Duncan’s Multiple Range) test was applied. The results have shown that polyherbal formulation played important role in the treatment of diabetes in alloxan induced diabetic rats. Polyherbal formulation produced anti-diabetic effect by reducing mean serum glucose (143.00±3.07) and increasing mean serum insulin levels (15.78±0.84) compared to diabetic group (+ve control) having mean serum glucose (518.00±5.31) and insulin levels (6.58±0.75) respectively at 8th week of treatment. Results of histopathological analysis of pancreas and liver showed that polyherbal formulation has potential to ameliorate the toxic effects of alloxan monohydrate. All the properties of polyherbal formulation make it a potential candidate for the treatment of diabetes. However, further research is required to elucidate its mechanism of action.