A most potent α-glucosidase inhibitor named salacinol has been isolated from an antidiabetic Ayurvedic traditional medicine, Salacia reticulata WIGHT, through bioassay-guided separation. The absolute stereostructure of salacinol was determined on the basis of chemical and physicochemical evidence, which included the alkaline degradation of salacinol to 1-deoxy-4-thio-d-arabinofuranose and the X-ray crystallographic analysis, to be the unique spiro-like configuration of the inner salt comprised of 1-deoxy-4-thio-d-arabinofuranosyl sulfonium cation and 1′-deoxy-d-erythrosyl-3′-sulfate anion. Salacinol showed potent inhibitory activities on several α-glucosidases, such as maltase, sucrase, and isomaltase, and the inhibitory effects on serum glucose levels in maltose- and sucrose-loaded rats (in vivo) were found to be more potent than that of acarbose, a commercial α-glucosidase inhibitor.