Picrorhiza kurroa Royle ex Benth. (Scrophulariaceae) is a traditional Ayurvedic herb known as Kutki. It is used as a remedy for diabetes by tribes of North Eastern Himalayan region of India. Present study was conducted to explore the mechanism of antidiabetic activity of standardized aqueous extract of Picrorhiza kurroa (PkE). PkE (100 and 200 mg/kg/day) was orally administered to streptozotocin induced diabetic rats, for 14 consecutive days. Plasma insulin levels were measured and pancreas of rat was subjected to histopathological investigations. Glucose transporter type 4 (GLUT-4) protein content in the total membrane fractions of soleus muscle was estimated by Western blot analysis. Plasma insulin level was significantly increased along with concomitant increase in GLUT-4 content of total membrane fractions of soleus muscle of diabetic rats treated with extract. There was evidence of regeneration of ${eta}$-cells of pancreatic islets of PkE treated group in histopathological examinations. PkE increased the insulin-mediated translocation of GLUT-4 from cytosol to plasma membrane or increased GLUT-4 expression, which in turn facilitated glucose uptake by skeletal muscles in diabetic rats.