Background: Many traditional treatments have been recommended in the alternative system of medicine for the treatment of diabetes mellitus. The aim of this study was to assess oxidative stress and histological changes in the pancreas of alloxan-induced diabetic rats following Myristica fragrans seed (nutmeg) extract treatment. Materials and methods: Forty-eight male Wistar rats weighing 200–250 g were randomly divided into six groups of 8 rats each — group I, non-diabetic rats; group II, diabetic rats; groups III, IV and V, diabetic rats given orally nutmeg extract at levels of 50, 100 and 200 mg/kg, respectively; and group VI, diabetic rats given orally metformin (100 mg/kg). The experiment lasted for 28 days. Results: Data showed that nutmeg extract (100 and 200 mg/kg) significantly decreased the blood glucose levels and increased the levels of serum insulin in diabetic rats. Administration of nutmeg extract to diabetic rats reduced oxidative stress and improved the antioxidant activities in pancreatic tissue. Histopathologic results of treated groups revealed marked improvement in the morphology of the pancreas compared with the control diabetic group. In addition, number of pancreatic islets and per cent of β-cells increased significantly in these groups in comparison with diabetic untreated group. Conclusions: These results suggest that nutmeg extract has potent antidiabetic and β-cell protection activities in alloxan induced diabetic rats, possibly via its antioxidant properties. (Folia Morphol 2020; 79, 1: 113–119)