In present study long-acting biodegradable Nateglinide loaded Poly (lactic-co-glycolic) acid nanoparticleformulation is reported for treatment of Type 2 Diabetes Mellitus (T2DM).Different formulations were prepared by varying drug: polymer ratio (1:1, 1:2, and 1:3) and polyvinyl alcohol as stabilizer in 0.5-1.5% concentration range by emulsificationsolventevaporation technique. Optimization was carried out by evaluating entrapment efficiency and particle size. Optimized formulation was characterized for in vitro drug release, surface charge property, SEM, chemical incompatibility and invivo evaluated for blood glucose lowering property in rat model. The obtained resultsindicatethat formulation composition containing drug:polymer ratio 1:3 and stabilizer concentration 1.5%  gives high encapsulation efficiency (82.15%) with mean particle diameter of 216 nm and drug release for 72h. Drug release data was best fitted to Higuchi model indicating drug release was mainly took place by diffusion mechanism. Oraladministrationof optimized nanoparticle formulation showed two fold better activity as compared to standardNateglinide formulation(P