The aim of the present study was a comparative investigation of water and 70% ethanol extracts derived from yellow and red onion ( Allium cepa L.) peels against diabetes and diabetic complications. The total phenolic contents (TPCs) and total flavonoid contents (TFCs) of each cultivar, measured to assess phytochemical characteristics, showed a direct correlation with the in vitro antioxidant effects. Among the two captives, the yellow onion peel extract showed higher antioxidant activity than red one. However, all extracts exhibited significant protein tyrosine phosphatase 1B (PTP1B) inhibitory activity (IC₅₀; 0.30–0.86 μg/ml), showing water extracts more potent (IC₅₀; approximately 0.3 μg/mL), than the 70% ethanol extracts (IC₅₀; approximately 0.8 μg/ml). Similarly, in insulin‐resistant HepG2 cells, all extracts enhanced the glucose uptake and reduced the expression of PTP1B in a concentration‐dependent manner, water extract displaying better activity. Our results overall suggest that in vitro antioxidant and antidiabetic potentials vary among red and yellow cultivars and extracting solvents, which could therefore be a promising strategy to prevent diabetes and associated complications.