This work aimed to investigate the effect of chamomile and its essential oil on diabetic rays in addition to determination of content and composition of the essential oil of roots and flowers of chamomile. Thirty six adult male albino rats of Sprague Dawley strain, weighting 200 +/- l0g used in this study, the rats were divided into two main groups. The first main group was [9 rats] fed on basal diet [as a control negative group] . The second main group was [27 rats] injected with aqueous solution of alloxan monohydrate [40 mg/kg body weight] to induce diabetes. The second main group was divided into three subgroups, Subgroup [1] fed on basal diet as a control positive group, Subgroup [2] fed on basal diet containing 10% chamomile. Subgroup [3] Jed on basal diet containing I ml chamomile essential oil. The results obtained showed that, the main componants of essential oil of roots and flowers of chamomile, [bisabolon-oxide, beta – eudesmol, Chamomilla esther, berkheyaradulene and spathulenol] were [0.70, 3.87, traces, 11.80 and 0.68%] in chamomile roots, while the essential oils of chamomile flower were [30, traces, 1.44, 2.89% and non-detect] , respectively. Injected rats with alloxan induced significant decrease in [feed intake, body weight Gain%, HDL-c, Acetylcholine esterase, Catalase activity and Glutathione activity] and induced significant increase in [brain and serum glucose] , total lipids, cholesterol, triglycerides, LDL-c, VLDL-c and lipid peroxidation, as compared to healthy rats group [non-injected rats] . Diabetic rats which treated with the 10% chamomile or one ml chamomile oil increased [the mean value of feed intake, HDL-c, Acetylcholine esterase, Catalase activity and Glutathione activity] significantly, on the other hand these treatments induced significant decrease in the other tested parameters, as compared to the positive control group. Chamomile or its oil improved the nutritional and biochemical status of diabetic rats, especially chamomile oil