Smallanthus sonchifolius (Yacon, Asteraceae) was originally cultivated in South America and used in food and traditional medicine by Andean inhabitants. Yacon is potentially beneficial for the management of diabetes and is composed of fructooligosaccharides, proteins, minerals and phenolic compounds. The aim of this study was to investigate the hypoglycemic effect of Yacon tuber extract (YTE) and its constituent, chlorogenic acid (CGA), in streptozotocin (STZ)-induced diabetic rats. In this study, a HPLC method was developed for simultaneous determination of major active phenolic components, CGA and caffeic acid in YTE. We investigated the hypoglycemic effect of YTE and CGA in STZ-induced diabetic rats and studied glucose tolerance test (GTT). The effect of orally administered multiple doses of YTE and CGA on plasma biochemical parameters was examined using diabetic rats. We also measured free radical scavenging activity by the 2,2-diphenyl-1-picrylhydrazyl (DPPH) assay. Oral administration of YTE (200 mg/kg) and CGA (10 mg/kg) for 6 weeks produced a significant hypoglycemic effect in STZ-induced diabetic rats. YTE and CGA-treated groups exhibited significantly decreased plasma glucose surge during the GTT. Total cholesterol (TC) and triglyceride (TG) concentrations were significantly decreased by 33% and 49%, respectively, in YTE-treated rats. TC and TG concentrations were also significantly decreased by 26 % and 41%, respectively, in CGA-treated rats. In the DPPH assay, free radical scavenging activity of CGA was similar to that of vitamin E, a positive control. This study suggests that YTE and its constituent, CGA, may be a useful option for management of hyperglycemia and diabetic nephropathy.