A potent natural α-glucosidase inhibitor called kotalanol has been isolated from an antidiabetic traditional Ayurvedic medicine, the roots and stems of Salacia reticulata WIGHT, through bioassay-guided separation. The structure of kotalanol was elucidated on the basis of chemical and physicochemical evidence to be the inner salt comprised of 1-deoxyheptosyl-3-sulfate anion and 1-deoxy-4-thio-D-arabinofuranosyl sulfonium cation. Kotalanol was found to show more potent inhibitory activity against sucrase than salacinol and acarbose.