Traditional Indian diets are functional and used both as food and medicine. Although in recent scientific studies these diets are evaluated for rich source of dietary fiber (whole grains and vegetables), antioxidants and other active principles suitable for diabetes. In recent years a wide range of herbal dietary supplements and herbal medicines have scientifically proven to benefit type 2 diabetes mellitus. Primarily, they have been selected and used based on fundamental principles of Ayurveda, such as their Rasa, Guna, Virya, Vipaka, Prabhava, and so on. Reviewing the characteristic properties along with important antidiabetic properties of conventional system of medicine, accentuates the role of these diets in Diabetes. However, as it is difficult to maintain a healthy lifestyle, especially if the individual has a sedentary job, nutraceuticals have recently been marketed to help patients. Nutraceuticals include food or part of food that provides medical or health benefits including the prevention or treatment of a disease. A numerous studies have suggested the potential association of nutraceuticals with diet and health. Bioactive compounds with medicinal value isolated from food/edible materials are accepted as nutraceutical compounds. Other than food/edible materials, medicinal plants which are generally considered safe without toxicity are also considered nutraceuticals by many, but not by all. This article mainly focuses on role of nutraceuticals in prevention and treatment of diabetes.