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The effect of aqueous leaf extract of Azadirachta indica (A. indica) was evaluated in paracetamol induced hepatotoxicity in rats. Liver necrosis was produced by administering single dose of paracetamol (2 g/kg, po). The liver damage was evidenced by elevated levels of serum aspartate aminotransferase (AST), alanine aminotransferase (ALT), gamma glutamyl transpeptidase (gamma-GT) and by histopathological observations of liver sections. Aqueous A. indica leaf extract (500 mg/kg, po) significantly (P< 0.01) reduced these elevated levels of AST, ALT and gamma-GT. Paracetamol induced liver necrosis was also found to be reduced as observed macroscopically and histologically.