Objective: To investigate the modulatory effects of bitter gourd extract on the insulin signaling pathway in the liver and skeletal muscle tissues of diabetic rats. Methods: The ethanolic extract of bitter gourd was prepared and its contents of total polyphenols and flavonoids were assayed. A neonatal streptozotocin-induced diabetic rat model was established and the diabetic rats were assigned into different groups and were treated with different doses of bitter gourd extract (100, 200, 400, or 600 mg/kg) or with glibenclamide (0.1 mg/kg) for 30 d. Fasting blood glucose, insulin, and lipid profile were evaluated and the insulin signaling pathway in the liver and skeletal muscle of rats was investigated. The correlations between homeostasis model assessment (HOMA) and the components of insulin signaling pathway were also evaluated. Results: Different doses of bitter gourd extract significantly ameliorated fasting blood glucose level and HOMA index for insulin resistance. Moreover, bitter gourd extract increased serum insulin and improved disrupted serum lipid profile. The levels of insulin receptor substrate-1 (IRS-1), p-insulin receptor β (p-IR-β), protein kinase C (PKC), GLUT2, and GLUT4 were improved by treatment with bitter gourd extract. The best results were obtained with 400 mg/kg dose of the extract, the effect of which was equivalent to that of glibenclamide. HOMA in the bitter gourd treated rats was negatively correlated with p-IR-β, IRS-1 and PKC in hepatic and skeletal muscle. HOMA was also negatively correlated with skeletal muscle GLUT4. Conclusions: Bitter gourd extract improves glucose homeostasis and lipid profile in diabetic rats via enhancement of insulin secretion and sensitivity. Therefore, bitter gourd can be used as a potential pharmacological agent for the treatment of type 2 diabetes mellitus.