Introduction: Diabetes is a chronic disorder generated by poor glycemic control; leads to developed several complications including delayed wound healing after any injury. These non healing wound leads to organ or limb salvage. The available modern treatments are not capable to complete control on these complications. There are several examples said that these complications can easily treated by herbal or folklore medicines. The fruit of Terminalia chebula used by traditional peoples in the treatment of diabetes and associated wound healing complications. In our previous study we had found that the ethaonilc extract of fruit of Terminalia chebula is most active in treatment of wound healing in diabetic rats. The aim of our study was to find the active fraction from ethanolic extract of fruit of Terminalia chebula, which is responsible for wound healing activity in diabetic rats. Methods: The wistar albino rats were made diabetic by single i.p. injection of streptozotocin (60 mg/kg). The excision, incision and dead space wound were implicated on back side of rats. The ethyl acetate soluble fraction of ethanolic extract of fruit of Terminalia chebula was applied topically in excision wound model while in incision and dead space wound model the ethyl acetate soluble fraction (100 mg/kg) was give orally for 16 days. Results: In the excision wound model the wound area and day of epithelization both were significantly decreased with faster wound closure in Ethyl acetate soluble fraction treated rats. There were significant increase in weight of wet & dry granulation tissue with increased amount of hydroxyproline, collagen and elastin was observed in treated rats by ethyl acetate soluble fraction of fruit of Terminalia chebula in dead space wound model. In incision wound model significantly higher tensile strength and decreased level of glycated hemoglobin was measured with decrease in blood glucose level in rats treaded with ethyl acetate soluble fraction of fruit of Terminalia chebula orally. Conclusion: The results suggested that the ethyl acetate soluble fraction of ethanolic extract of fruits of Terminalia chebula having healing potential in streptozotocin induced diabetic rats.