Plant-derived natural products remain an important source of therapeutic leads for managing type 2 diabetes mellitus (T2DM). Australian native plants, rich in unique and diverse phytochemicals, are still underexplored for their antidiabetic properties. Through a comprehensive literature review, we identified 126 Australian tropical plant species from 49 families and 88 genera traditionally used to treat wounds and diabetes-related symptoms. Of these, 28 species were edible, with fruits being the most frequently consumed part. Experimental evidence showed that crude extracts from 29 species have been tested for antidiabetic activity, with Syzygium cumini and Morinda citrifolia being the most extensively studied. Some species (Morinda citrifolia, Eleocharis dulcis, Brassica rapa) have also undergone clinical evaluation in diabetic patients. Across 26 species, 374 pure compounds were isolated, of which 51 were screened for bioactivity, and 16 were identified as potential antidiabetic drug leads. From this pool, ten previously unstudied species were selected for further evaluation of antioxidant capacity (DPPH and FRAP assays), total phenolic content (TPC), total flavonoid content (TFC), and antidiabetic activity (α-glucosidase and α-amylase inhibition). Among these, Eugenia sp., Terminalia sp., and Buchanania sp. demonstrated the strongest activity based on a combined scoring system. These findings highlight the antidiabetic potential of underutilised Australian native plants and propose a bioactivity-guided prioritisation framework to accelerate natural product-based drug discovery.