OBJECTIVE Nanoparticles can be employed to improve the therapeutic activity of natural products. Type 2 diabetes mellitus is a serious health condition that has spread like a "modern pandemic" worldwide. In the present study, we developed silver nanoparticles, Ag-NPs, with an aqueous extract from Balanites aegyptiaca to investigate their antioxidant and anti-inflammatory activity in STZ-induced diabetic rats. METHODS Aqueous extracts of Balanites aegyptiaca seeds (BAAE) were used in the synthesis of BAAE-AgNPs, which were characterized using FTIR and TEM. Different doses of BAAE-AgNP (1/50 LD50; 29.4 mg/kg b.w. and 1/20 LD50: 73.5 mg/kg b.w.) were administered to STZ-induced diabetic rats to evaluate their potential antidiabetic activity. RESULTS FTIR spectral data indicated the presence of flavonoids and polyphenols in BAAEAgNPs. The size of the BAAE-AgNPs, determined by TEM examination, was 49.33 ± 7.59 nm, with a zeta potential of +25.37. BAAE-AgNPs were characterized by an LD50 value of 1470 mg/kg b.w. In diabetic rats, the daily oral administration of both doses of BAAE-AgNPs (29.4 and 73.5 mg/kg b.w.) for 12 weeks resulted in a significant improvement in body weight, insulin homeostasis, HbA1c, HDL-C, MDA, and pancreatic SOD, CAT, and GSH. They reduced plasma glucose, cholesterol, and triglycerides. This treatment also resulted in a significant decrease in pancreatic IL-6, p53, and TNF-α in diabetic rats. Furthermore, BAAE-AgNPs down-regulated pancreatic TGF-β1 and Akt gene expression in diabetic rats and resulted in a significant decrease in the regulation of hepatic GLUT-2, as well as an increase in the regulation of hepatic GK and pancreatic B-cl2 gene expression. The histopathological results obtained indicated that BAAEAgNPs improved pancreatic tissue metabolism by enhancing antioxidant enzymes, suppressing inflammatory cytokines, and scavenging free radicals. CONCLUSIONS The findings implied that similar to the glibenclamide-treated groups, in the BAAEAgNPs treated group, the compromised antioxidant status normalized in STZ-induced diabetes. By scavenging free radicals, BAAE-Ag-NPs protected against lipid peroxidation while reducing the risk of complications from diabetes. Compared to the daily dose of 29.4 mg, the impact was more prominent at 73.5 mg.