The aim of the present study was to evaluate the anti inflammatory potential of Aloe vera in alloxan induced diabetes in rats. Experimental Diabetes was induced in rats with alloxan. The animals were divided into four groups of six each (n=6). Group I: Normal, Group II: Alloxan induced diabetic rats, Group III: Diabetic rats supplemented with AV gel extract for 21 days, Group IV: diabetic rats treated with glibenclamide. All the drugs were administered orally (using an intra gastric tube) in a single dose in the morning for 21 days. Blood samples were collected from the overnight fasted rats. Oral administration of Aloe barbadensis gel significantly decreased the level of homocysteine and the level of folic acid was significantly elevated when compared to diabetic control. The results suggest potent anti-inflammatory potential of Aloe barbadensis gel in experimental diabetes, and thus Aloe vera can be used as an alternative remedy for treatment of diabetes mellitus and its complications.