Phoenix dactylifera L. (Arecaceae) spathe has antioxidant and anti-inflammatory effects. Effects of hydro-alcoholic extract of Phoenix dactylifera spathe were examined in streptozotocin (STZ)-induced diabetic rats. Forty-nine male Wistar rats were randomly divided into seven groups; group 1 received normal saline solution daily, group 2 received STZ (50 mg/kg) on the first day, group 3 received STZ (50 mg/kg, ip) at the beginning of the study and metformin (150 mg/kg), daily for 30 days, groups 4–6 received STZ (50 mg/kg, ip) at the beginning of the study and were treated with Phoenix dactylifera spathe extract (PDSE; 50, 100, and 200 mg/kg, respectively) for 30 days, and group 7 received PDSE (200 mg/kg) for 30 days. Fasting blood sugar (FBS), insulin, weight change, adipokine leptin, tumor necrosis factor-α (TNF-α), high-sensitivity C-reactive protein (hsCRP), lipid profile, and oxidative stress biomarkers were assessed. Qualitative analyses of extracts revealed the presence of flavonoids, phenols, and alkaloids but the absence of steroids and saponins. PDSE significantly reduced serum level of FBS, triglyceride, low lipoprotein density, cholesterol, adipokine leptin, TNF-α, hsCRP, and malondialdehyde. PDSE significantly increased the serum levels of high lipoprotein density, insulin, total antioxidant capacity, reduced glutathione, as well as the body weight of diabetic rats. Our results showed that PDSE improves glycemic and lipidemic profile in STZ-induced diabetic rats. This suggests that PDSE may be a promising agent to mitigate diabetic symptoms in diabetic patients. © 2021, The Author(s), under exclusive licence to Springer-Verlag London Ltd. part of Springer Nature.