This study investigated the anti-inflammatory and anti-diabetic potential of Melia azedarach stem bark extract (MASBE) using integrated in vitro, in vivo, and in silico approaches. Anti-diabetic activity was assessed through yeast glucose uptake, glucose adsorption, α-amylase, and α-glucosidase inhibition assays, followed by evaluation in an alloxan-induced diabetic mouse model. Anti-inflammatory activity was evaluated by human red blood cell (HRBC) membrane stabilization, heat-induced hemolysis, protein denaturation assays, and an in vivo xylene-induced ear edema model in mice. Molecular docking investigated the interactions of major phytoconstituents with inflammatory targets (COX-1, COX-2, and 5-LOX) and the anti-diabetic target AMPK. The extract showed potent anti-diabetic effects, including maximum yeast glucose uptake (78.99%), α-amylase inhibition (76.72%), and α-glucosidase inhibition (74.53%), along with effective glucose adsorption. In diabetic mice, MASBE significantly reduced blood glucose levels and improved body weight and pancreatic and liver histology. MASBE exhibited significant dose-dependent anti-inflammatory activity, achieving maximum inhibition of 63.76% in HRBC membrane stabilization, 56.09% in heat-induced hemolysis, and 69.69% in protein denaturation assays, while markedly reducing xylene-induced ear edema in mice. Molecular docking revealed favorable binding affinities of α-linolenic acid, protocatechuic acid, and cyanidin-3-O-β-D-glucoside toward inflammatory and diabetic targets, with docking scores ranging from −3.72 to −6.85 kcal/mol, supported by key hydrogen-bond interactions. The combined experimental and computational findings demonstrate that MASBE possesses potent anti-inflammatory and anti-diabetic activities. These effects are likely mediated through multiple mechanisms involving inhibition of inflammatory mediators and modulation of glucose metabolism, highlighting M. azedarach stem bark as a promising natural source for the development of multifunctional therapeutic agents.