Diabetes mellitus represents one of the main health challenges worldwide, characterized by hyperglycemia and long-term serious microvascular and macrovascular complications. Marine organisms are a promising reservoir of bioactive metabolites for developing effective antidiabetic therapies with fewer side effects. The sea urchin Tripneustes gratilla (T. gratilla) is widely distributed in the Red Sea, with limited reports of its pharmacological activities and chemical characterization. In this study, a nanosuspension formulation of T. gratilla extract (T. gratilla-NS) was developed to enhance the bioavailability of its bioactive constituents. This study investigated the antidiabetic potential of T. gratilla extract through an integrated approach encompassing chemical profiling of the extract, assessment of its alcoholic extract for in vitro inhibitory effects on α-amylase and α-glucosidase, and in vivo evaluation of T. gratilla-NS in an alloxan-induced diabetic rat model. We found that the alcoholic extract showed potent inhibitory action toward α-amylase with IC50 5.31 ± 0.05 µg/mL and moderate inhibitory activity toward α-glucosidase with IC50 21.36 ± 0.06 µg/mL. T. gratilla-NS significantly increased insulin levels, reduced blood glucose levels, and restored pancreatic damage. Furthermore, it enhanced the levels of superoxide dismutase and total antioxidant capacity with a concomitant decrease in malondialdehyde concentration in pancreatic tissue. The observed activities could be attributed to a wide array of diverse compounds, terpenes, mainly sesquiterpenes, diterpenes, steroids, and polyunsaturated fatty acids detected by GC-MS, compounds with a phenolic nucleus equal to 54.26 ± 1.27 mg. GAE/g of extract. This research highlights the dual role of T. gratilla-NS in combating diabetes and subsequently attenuating its associated complications.