To evaluate USG and CT imaging findings in differentiating transudative and exudative pleural effusion. Materials and methods: A prospective observational study was performed over a period of eighteen months between January 2016 and June 2017. Eighty patients with pleural effusion were included and were evaluated with USG and CT along with diagnostic thoracocentesis. USG appearances and CT attenuation values along with additional findings like presence of pleural thickening, pleural nodules and loculation were evaluated. Results: 24 (30%) were transudates and 56 (70%) were exudates. Transudative were always anechoic. Exudates were complex septated (62.5%), echogenic (25%) or complex non-septated (8.9%) on USG with very few being anechoic (3.5%). Loculations were better appreciated on ultrasound while pleural thickening and nodules were better seen on CT. Mean attenuation values were significantly higher in exudates (14.65 ± 6.07; mean ± SD, range: 4.5 to 34) than transudates (4.66 ± 2.29; mean ± SD, range: 1.3 to 8.2) with a P value <0.01. Effusions can be considered as transudative if the CT attenuation value is <8, with a sensitivity of 91.6% and specificity of 82.7% with a significant P value <0.01. Pleural thickening, nodules and loculations were seen commonly in exudates than transudates with a high specificity (91.6 %, 95.8% and 100% respectively). Conclusion: USG is a helpful non-invasive and bedside tool in determining the nature of pleural effusion. CT attenuation values play a useful role in differentiating the nature of pleural effusion. Transudative effusions can be considered when HU values are <8.