Diabetes mellitus is a chronic metabolic disorder characterized by persistent hyperglycemia arising from insulin resistance or impaired insulin secretion. Conventional and commercially available effective antidiabetic drugs are often associated with adverse effects and reduced efficacy over prolonged use, highlighting the need for safer and plant-based alternatives. Persea americana seed extract (PSE) has antidiabetic potential but suffers from non-specific distribution and poor bioavailability, thus limiting its clinical application. This study developed and evaluated the poly(lactic-co-glycolic acid) (PLGA) nanoparticles encapsulating Persea americana seed extract (PSENP) to enhance therapeutic efficacy and delivery. Nanoparticles were characterized for zeta size, zeta potential, transmission electron microscopy (TEM), stability and their phytochemical composition, with HPLC confirming the presence of bioactive compounds including quercetin, syringic acid, and gallic acid. In-vivo, forty wistar rats were allocated into five groups: normal control, diabetic control, metformin-treated, PSE-treated, and PSENP-treated. Biochemical parameters were evaluated including fasting blood glucose, insulin (serum level), lipid profile, oxidative stress biomarkers (superoxide dismutase, catalase), and inflammatory cytokines (IL-6, TNF-α). Histopathological examination of pancreatic tissue and safety evaluations for kidney and liver were performed. Moreover, In-silico study demonstrated the strong binding affinity between quercetin and α-glucosidase, thus supporting the glucose-lowering role of quercetin. The PSENP administration resulted in statistically significant glycemic control, enhanced antioxidant activity of enzymes, improved lipid profile, reduced pro-inflammatory cytokines, and preservation of architecture of pancreas, with no renal and hepatic toxicity. The findings of the study indicated that PLGA-based nanoformulation of P. americana seed extract provides a promising therapeutic strategy for diabetes management and its oxidative and inflammatory complications.