The present study was designed to investigate the therapeutic potential of oxazetidin-2-one derivatives in a rat model of streptozotocin (STZ)-induced diabetic neuropathic pain. A single dose of STZ (i.e., 75 mg/kg; i.p.) was administered to induce diabetes-associated neuropathic pain in rats. The serum glucose level was estimated on days 0, 3, 42, and 45. A battery of behavioral tests, i.e., hot plate, plantar, tail immersion, and tail flick tests, were performed to assess the degree of thermal hyperalgesia in the paw and tail regions at different time intervals, i.e., 42nd and 44th day. Total protein, thiobarbituric acid reactive substances (TBARS), nitrite, reduced glutathione (GSH), and total calcium levels in sciatic nerve tissue were also estimated on the 45th day of the experiment. The test compound (CHO; 5, 10, or 15 mg/kg; p.o.) and pregabalin (10 mg/kg; p.o.) were administered for three consecutive days beginning on the 42nd day after STZ administration. STZ significantly induced diabetic neuropathic pain, as indicated by thermal hyperalgesia in the paw and tail along with increases in the TBARS, nitrite, and total calcium levels and a decrease in the GSH level. Administration of CHO attenuated STZ-induced behavioral and biochemical changes in a dose-dependent manner compared to those in the pregabalin-treated group. The attenuating effect of CHO (15 mg/kg) on STZ-induced diabetic neuropathic pain may be attributed to its neuroprotective potential via multiple pharmacological actions, including anti-lipid peroxidation, free radical scavenging, and inhibition of intracellular calcium accumulation.