Many herbs are known to be hypoglycemic, Cynodon dactylon is an indigenous medicinal plant used in Indian herbal medicine for the treatment of diabetes. The aim of this study was to identify the phytocontituents of Cynodon dactylon extract by Gas Chromatography–Mass Spectrography (GC-MS) and to evaluate its invivo hypoglycemic effect in streptozotocin induced diabetic rats. The rats were treated orally with the extract of C.dactylon at 200mg and 400 mg / kg bwt. for 28 days. Biochemical parameters viz. fasting blood glucose (FBG), blood urea, serum creatinine and total cholesterol were analyzed. Phytocontituents like phytol, Octadecanoic acid, squalene, thymol, n-Hexadecanoic acid were present in GC-MS analysis. It was also observed that FBG showed a significant decrease at a dose of 400mg/kg b.wt. (From 283±2.49 to 117.8±4.69mg/dL)when compared with that of standard drug glibenclamide. The results obtained in this study clearly indicates that the extract possess anti-hyperglycemic activity and may be promising for the development of phytomedicine for diabetes mellitus.