Objective: The aim of this study was investigating the effect of 12 weeks of yoga and aerobic exercise (running on a treadmill) on the sleep quality in women with Type 2 diabetes. Materials and Methods: 39 diabetic women were selected from Semnan city with the mean age of 46.85±3.35 years, weight of 69.79±17.18 kg, height of 155.03±5.00, BMI of 29.64±5.00 kg/m 2 who had a background of diabetes for 6.46±2.69 years. They were then randomly divided into yoga exercise (n=15), aerobic exercise (n=13), and control group (n=11). The exercise program was performed for 12 weeks, three sessions per each week. In order to measure the sleep quality, the Pittsburgh Sleep Quality Index (PSQI) was used. The data were analyzed by non-parametric wilcoxon and Kruskal-Wallis Test at significance level of p<0.05. Results: Overall score of sleep quality improved after six (p=0.001) and 12 (p=0.001) weeks of yoga exercise. Also, significant effect was observed after 6 weeks of aerobic exercise (p=0.039). However, the positive effect was diminished to under significant levels after 12 weeks of aerobic exercise (p=0.154). Kruskal-Wallis Test showed significant differences between yoga and aerobic groups after 12 weeks of exercise (p=0.002). No significant differences were observed in control groups in all situation. Conclusions: It can be concluded that yoga exercise is more effective in improving the sleep quality in comparison with the same course of aerobic exercise in women suffering from diabetes Type 2. Thus, yoga exercise can be suggested to these patients.