Hydroxychloroquine (HCQ) is supposed to have favorable effects in diabetes mellitus (DM). However no previous experimental studies had investigated its effect on the structure of the endocrine pancreas, islets of Langerhans (IOL), in DM. In addition, the mechanism by which HCQ acts in DM is not well understood. In this study, we hypothesized that the possible favorable effects of HCQ in DM at the structural as well as at metabolic levels could be accomplished, in part, by its anti-inflammatory action. A total of 45 rats were divided equally into; control, DM and HCQ + DM groups (received citrate buffer, 27.5 mg/kg single ip STZ and STZ + HCQ 200 mg/kg/w respectively). After 4 weeks, samples from pancreas were histologically studied for the resulting changes. The HCQ + DM group showed preservation of IOL structure, a significant increase (p < 0.05) in the β-cell area, %, mass, IOL proliferation and neogenesis as well as correction of the significantly increased (p < 0.05) α-cell area, %, disturbed glucose homeostasis and lipid profile compared with the DM group. The significantly elevated inflammatory cytokines in the latter were lowered in the HCQ + DM group. Therefore, HCQ showed definite favorable effects on the histological as well as the metabolic profiles in DM which may be partly attributed to its anti-inflammatory action. This notable improvement of DM by HCQ deserves further studies to distinctly approve HCQ as a promising oral hypoglycemic agent.