Tecoma stans aqueous extract (TAE) is widely used as a traditional antidiabetic remedy in Mexico; its rational use is controversial. We provide evidence of its main antidiabetic activities. To evaluate in vivo and in vitro intestinal alpha-glucosidases inhibition as the possible mode of action of TAE on type 2 diabetes mellitus (DM2) animal models, and to test the effects of its sub-chronic administration on lipids and glucose blood levels. In healthy and streptozotocin (STZ)-induced diabetic male Sprague-Dawley rats, glucose or cornstarch was administered after an oral dose of TAE, acarbose, tolbutamide or vehicle, in order to build starch and glucose tolerance curves (STC and GTC). An intestinal brush border preparation was used to evaluate the TAE alpha-glucosidases inhibitory activity. Moreover, in STZ-induced diabetic rats TAE, tolbutamide or vehicle was administered for 21 days for evaluate their effects on fasting glucose cholesterol and triglycerides. Also, TAE total phenolic compounds were quantified. In STC, TAE decreased hyperglycemic peak values in both healthy and STZ-treated rats, in a magnitude similar to that of acarbose. The in vitro preparation showed a dose-dependent inhibition of glucose release from starch. Sub-chronic administration of TAE significantly reduced cholesterol and triglycerides levels. Moreover, we confirmed that acute and sub-chronic administration of TAE (500mg/kg) in both rat models did not diminish fasting glucose and did not modify the GTC. The study present evidence that the main antidiabetic effect of TAE is due to intestinal alpha-glucosidase inhibition by decreasing the postprandial hyper-glycaemia peak; in addition, TAE sub-chronic administration reduces triglycerides and cholesterol, without modifying fasting glucose.