We undertook the present study to evaluate the hypolipidaemic effect of an aqueous extract of Tinospora cordifolia roots, an indigenous plant used in Ayurvedic medicine in India. Administration of the extract of T. cordifolia roots (2.5 and 5.0 g/kg body weight) for 6 weeks resulted in a significant reduction in serum and tissue cholesterol, phospholipids and free fatty acids in alloxan diabetic rats. The root extract at a dose of 5.0 g/kg body weight showed highest hypolipidaemic effect. The effect of T. cordifolia roots at 2.5 and 5.0 g/kg body weight was better than glibenclamide. Insulin restored all the parameters to near normal values.