Fenugreek reduces the increase in blood sugar levels after eating without raising insulin levels, and also reduces LDL and VLDL cholesterol and triglyceride levels in the blood. It is a useful adjunct to help with some side effects of reducing carbohydrate consumption in your diet.
Fenugreek use has a long history, having been used in ancient Egypt, China, and India. It’s name is thought to derive from an anglicised form of the latin for “greek hay”, referring to when the plant was grown as a fodder crop for animals in classical Greece. It is a common condiment used in Indian cooking, and also used in Ayurveda.
The seeds are rich in fibre, saponins and protein, which combine to convey the potential health benefits. The polysaccharide, Galactomannan, has been extensively investigated (mostly in rats and mice) to try and isolate the main hypoglycaemic agent, and to further elucidate the physiological effects of the herb.
In a nutshell it has been found that:
Fenugreek soluble fibre can effectively reduce a post prandial rise in blood glucose without stimulating an increase in insulin production. Thus the hypoglycaemic activity does not place any extra load on pancreatic beta cells. 
Fenugreek galactomannan (soluble and insoluble fibre present in the seed)reduces glycosylated haemoglobin, and possibly inhibits glycogenolysis of the liver - pointing to an action through an extra-pancreatic route.
Fenugreek slows gastric emptying, delays absorption of glucose from the gastrointestinal tract, and enhances peripheral insulin action. 
High doses might produce the following side-effects: hypoglycaemia, diarrhoea, flatulence.
In a small clinical trial (n=10) administering 50g of fenugreek powder twice a day to patients with diabetes the fenugreek significantly reduced fasting blood sugar and improved the glucose tolerance test.There was a 29% reduction in the serum glucose level. Serum total cholesterol, LDL, VLDL and triglycerides were also significantly reduced.
How to use Fenugreek
Use 2 teaspoons (or to taste) of the seeds, crushed, per cup. Drink this after meals. Making it too strong can bring out a bitter taste, but make it strong the first time and work backwards from there until you arrive at what suits you.
Up to 5ml of the tincture, diluted with a little water, 3 times a day after eating. Fenugreek tincture also works very well mixed with other herbs with complementary actions, such as cinnamon and cardamom.
Effect of soluble dietary fibre fraction of Trigonella foenum graecum on glycemic, insulinemic, lipidemic and platelet aggregation status of Type 2 diabetic model rats (2003) J.M.A. Hannana et al. Journal of Ethnopharmacology Volume 88: 1: 73-77
Use of Fenuqreek seed powder in the management of non-insulin dependent diabetes mellitus (1996)Sharma et al. Nutrition Research 16:18:1331-1339
Antidiabetic Activities of Fenugreek (Trigonella foenum-graecum) Seeds. (2011) Anwar et al. Nuts and Seeds in Health and Disease Prevention (Pp 469-478)
Soluble dietary fibre fraction of Trigonella foenum-graecum (fenugreek) seed improves glucose homeostasis in animal models of type 1 and type 2 diabetes by delaying carbohydrate digestion and absorption, and enhancing insulin action.(2007)Hannan et al. Br J Nutr. Mar;97(3):514-21.
Effect of fenugreek seeds on blood glucose and serum lipids in Type 1 diabetes.(1990) Sharma et al.Eur J Clin Nutr 44(4): 301-6.