Background Oxidative stress and inflammation play important roles in the development of diabetes. Metformin (MET) is considered as the first-line therapy for patients with type 2 diabetes (T2D). Hypothalamic paraventricular nucleus (PVN) and hypothalamic arcuate nucleus (ARC) are vital in obesity and diabetes. However, there have been few studies on the effects of MET on inflammatory reaction and oxidative stress in the PVN and ARC of T2D diabetic rats. Methods Male Sprague-Dawley (SD) rats were fed with high-fat diet (HFD), and intraperitoneally injected with low-dose streptozotocin (STZ, 30 mg/kg) at 6th week to induce T2D diabetes. After injection of STZ, they were fed with HFD continually. Starting from the 8th week of HFD feeding, T2D rats received intragastrical administration of MET (150 mg/kg/day) in addition to the HFD for another 8 weeks. At the end of the 15th week, the rats were anaesthetized to record the sympathetic nerve activity and collect blood and tissue samples. Results In comparison with control rats, T2D diabetic rats had higher levels of pro-inflammatory cytokines (PICs) and excessive oxidative stress in the PVN and ARC, accompanied with more activated astrocytes. The renal sympathetic nerve activity (RSNA) and the plasma norepinephrine (NE) increased in T2D diabetic rats. The expression of tyrosine hydroxylase (TH) increased and the expression of 67-kDa isoform of glutamate decarboxylase (GAD67) decreased in T2D diabetic rats. Supplementation of MET decreased blood glucose, suppressed RSNA, decreased PICs (TNF-α, IL-1β and IL-6) in PVN and ARC, attenuated oxidative stress and activation of astrocytes in ARC and PVN of T2D diabetic rats, as well as restored the balance of neurotransmitter synthetase. The number of Fra-LI (chronic neuronal excitation marker) positive neurons in the ARC and PVN of T2D diabetic rats increased. Chronic supplementation of MET also decreased the number of Fra-LI positive neurons in the ARC and PVN of T2D diabetic rats. Conclusion These findings suggest that the PVN and ARC participate in the beneficial effects of MET in T2D diabetic rats, which is possibly mediated via down-regulating of inflammatory molecules, attenuating oxidative stress and restoring the balance of neurotransmitter synthetase by MET in the PVN and ARC.