Diabetic neuropathy (DN) is microvascular issues caused by diabetes mellitus (DM) that damages peripheral nerve system. DN-induced pain progression and persistence occur due to many risk factors, including as increased TNF-α, NF-κB, and COX-2 levels. It was investigated whether Isosteviol 16-oxime (IO) could protect against DM-induced neuropathic pain. For this purpose streptozotocin-induced diabetic rat model was employed. After four weeks of streptozotocin injection, IO was given till the sixth week. On days 28, 31, 35, 38, and 42, behavioral assessments were done before and after Streptozotocin administration. After six weeks of streptozotocin treatment, rats were sacrificed, and spinal cord and sciatic nerve samples were taken for molecular analysis. The interaction kinetics and binding affinities of IO with TNF-α, NF-κB, and COX-2 targets were studied using computational methods. IO intervention significantly (P < 0.001) reduced mechanical allodynia and thermal hyperalgesia. The treatment of IO led to increased GSH, GST, and CAT concentrations in the spinal cord and sciatic nerve, while reducing LPO levels (P < 0.001). IHC and Nissl staining showed that IO successfully reduced DN-induced pathological changes. IO also down regulated the expression of inflammatory mediators TNF-α, NF-κB, and COX-2, suggesting its potential as a neuroprotective drug. In comparison to pregabalin, IO demonstrated enhanced antinociceptive properties and diminished hyperalgesic effects. Consequently, IO exhibits a more pronounced reduction in pain perception and inflammation. Our investigation found that IO may protect against DM-induced neuroinflammation by suppressing cytokines and increasing antioxidant levels. More research is needed to determine the exact mechanism of IO in neuroprotection and pain reduction.