The effects of magnolol (Mag) on hyperglycemia and hyperlipemia, hepatic oxidative stress and cytochrome P4502E1 (CYP2E1) activity of diabetic rats induced by high-fat diet (HFD) and streptozotocin (STZ) were studied. After oral administration of Mag (25, 50 and 100 mg x kg(-1) x d(-1)) for continuous 10 weeks, the blood glucose and lipids (TC, TG and LDL-C) levels, as well as the hepatic CYP2E1 activity and MDA content of diabetic rats, decreased significantly (P < 0.05 or P < 0.01), whereas the oral glucose tolerance and hepatic antioxidant enzymatic activities (CAT and GSH-Px) of diabetic rats, increased significantly (P < 0.05 or P < 0.01). The results indicated that Mag was effective against the hepatic oxidative damage, hyperglycemia and hyperlipemia of diabetic rats induced by HFD and STZ, and the inhibition of Mag on hepatic CYP2E1 activity could be an important mechanism of Mag against hepatic insulin resistance and oxidative damage.