Ethno-pharmacological relevance: The genus Aloe has a long history of usage in medicine. Aloe barbadensis Miller, commonly known as Aloe vera, is said to possess anti-diabetic, anti-inflammatory, anti-cancer, anti-microbial, immunomodulation, wound healing properties. Aim of the study: In diabetes mellitus, loss in intestinal permeability is observed with high levels of zonulin and low levels of glucagon-like peptide-1 (GLP-1) leading to hyperglycemia. The aim of the study was to understand the role of peptide/polypeptide fraction (PPF) of Aloe vera in the alleviation of diabetes through maintaining the intestinal permeability by regulating the zonulin and GLP-1 levels. Materials and methods: The PPF of Aloe vera was obtained through trichloroacetic acid precipitation. The anti-diabetic potential of the PPF was tested through DPP-IV inhibition, glucose diffusion assay, and by using Rin-m5F cells. The anti-diabetic potential of the PPF was tested at a dose of 0.450 mg/kg bw in vivo using streptozotocin-induced diabetic Wistar rats. The effect of PPF on fasting plasma glucose, insulin, glucagon, Zonulin, GLP-1, DPP-IV, levels were studied in diabetic rats. The histopathological studies of the pancreas, small intestine, and liver were carried out for organ-specific effects. Results: PPF has the ability to reduce fasting plasma glucose levels with concomitant increase in insulin levels in streptozotocin-induced diabetic rats. It was also observed that increase in GLP-1 levels with a decrease in DPP-IV and zonulin levels thereby mitigating the loss of intestinal permeability. These findings correlate with the small intestine's histopathological observation where the excessive proliferation of epithelium in the small intestine of diabetic rats was reduced after PPF treatment. Conclusion: These results suggest that the PPF of Aloe vera alleviates diabetes through islet cell rejuvenation via GLP-1/DPP-IV pathway and thereby suggesting the usage of PPF as an alternate medicine for diabetes mellitus with the possibility to reduce the intestinal permeability and zonulin levels. © 2021 Elsevier B.V.