The aim of the present study was to assess the therapeutic potential of melatonin (Mel) in diabetic central neuropathy in a rat model of streptozotocin (STZ)-induced diabetes. The rats were injected with 60 mg/kg STZ and diabetes was confirmed by blood glucose levels (BGL) ≥ 250 mg/dL. Mel treatment (50 mg/kg) was started 72 h before the STZ injection and continued for 45 days. In addition, normal control, vehicle (5% ethanol) control, and Mel-treated non-diabetic control were also included. STZ induced a diabetic phenotype with persistent hyperglycemia and elevated oxidative stress in the brain, liver, and kidneys compared to the control groups. In addition, the diabetic rats showed severe β-cell necrosis with reduced insulin levels, cerebral neuronopathy, myelinopathy, axonopathy, microglial and astroglial activation, and vascular damage. While Mel treatment did not prevent the development of STZ-induced diabetes mellitus and had no significant effect on the BGLs of the diabetic rats, it significantly ameliorated the diabetes-induced oxidative stress and neurodegeneration. Taken together, Mel showed potent therapeutic effects against the neurological complications of hyperglycemia and therefore can be used to treat diabetic neuropathy.