Diabetes is one of the most prevalent metabolic disorders characterized by hyperglycemia, glycosuria, altered lipid and protein metabolism. It affects nearly 25% of the World population. An ethnomedical survey revealed that Anacardium occidentale parts are used as a remedy for the treatment of diabetes mellitus and as antibacterial decoctions in the treatment of infectious diseases. In this study, the ethylacetate effluent of ethanolic fraction of A. occidentale leaf at 300mg/kg bw had the best hypoglycemic activity in alloxan induced diabetic rats compared to other effluents at same dose and the standard drug-metformin. However, the ethylacetate effluent at 200mg/kg bw had equivalent hypoglycemic activity with metformin. The spectral analyses of the ethylacetate effluent revealed the presence of esters. The antibacterial effect of the stepwise fractions of A. occidentale leaf revealed that hexane inhibits Salmonella typhi (10mm), ethylacetate inhibits Staphylococcus aureus (12mm) while ethanol inhibits Kliebsella pneumonae (11mm). The results indicate that A. occidentale leaves had significant hypoglycemic and antibacterial potentials which can be exploited for drug development.