Background Ojamin (OJ), a polyherbal antidiabetic formulation, is extensively used as a food supplement to control diabetes alone or along with synthetic antidiabetic agents. However, it's phytochemical and pharmacological investigations are lacking. Objective The present study was undertaken to study antidiabetic and antihyperlipidemic potentials of OJ and its interaction with Metformin in streptozotocin (STZ)-induced diabetic rats. Materials and methods Diabetes was induced in Wistar rats by single intraperitoneal (i.p.) injection of streptozotocin (60 mg/kg). Antidiabetic, antihyperlipidemic activities of OJ were evaluated at dose of 0.28 ml/kg by estimating biochemical changes in urine, serum and liver tissue homogenate and histological changes in liver and pancreatic tissues. Metformin (100 mg/kg, p.o.) was used as reference standard drug. Results Results indicate that STZ administration caused hyperglycemia, increased serum glycosylated hemoglobin content, altered serum lipid profile, polyuria, decreased liver glycogen content and histological changes in liver and pancreatic tissues. This elevated serum glucose level and urine volume was significantly decreased by OJ. Supplementation with OJ produced significant improvement in serum lipid profile and glycosylated hemoglobin content along with significant increase in the liver glycogen content. OJ treatment also restored histological changes in liver and pancreatic tissue near to the normal. The observed antidiabetic and hypolipidemic effects of OJ were superior to Metformin. Co-treatment of diabetic rats with OJ and Metformin failed to control blood glucose levels. Conclusion It is concluded that the OJ possesses significant antidiabetic and antihyperlipidemic activities in rats. However, co-administration of OJ and Metformin is cautioned.