Background: Insulin and thyroid hormones acts as antagonists in cellular metabolism and change in level of any one can result in functional derangement of the other. The objective was to find the prevalence of thyroid dysfunction in type 2 diabetes mellitus patients. Method: 100 type 2 diabetes mellitus patients were included in this study. Study protocol included detailed clinical history, examination and investigations. Fasting plasma glucose, post prandial plasma glucose, HbA1c, lipid profile, and thyroid profile of these subjects were determined. Result: In this study thyroid dysfunction was present in 32% of the study population. Subclinical hypothyroidism was present in 18% and overt hypothyroidism in 8% of the 100 subjects with type 2 diabetes. Subclinical hyperthyroidism was detected in 1% and overt hyperthyroidism in 5% of the patients. Conclusion: Thyroid dysfunction is more common in type 2 diabetes mellitus patients. More case control studies with a larger population are needed to confirm this association.