Introduction: Type 2 diabetes mellitus is a heterogeneous group of disorders characterized by variable degrees of insulin resistance, impaired insulin secretion, and increased glucose production. Type 2 DM is preceded by a period of abnormal glucose homeostasis classified as impaired fasting glucose (IFG) or impaired glucose tolerance (IGT). Respiration is the process by which oxygen and CO2 are exchanged between the atmosphere and the mixed venous blood to meet the metabolic demands of the body. Clear decrements in lung function have been reported in patients with diabetes over the past 2 decades, and many reports have suggested plausible pathophysiological mechanisms. However, at the present time, there are no reports of functional limitations of activities of daily living ascribable to pulmonary disease in patients with diabetes. Material and Methods: The study was carried out in collaboration with Diabetes Outpatient Department of Tertiary Care Teaching Hospital. One hundred and two patients of type 2 DM diagnosed by the treating physician, of the age group 40–60 years taking oral hypoglycemics, were randomly selected from the Diabetes Outpatient Department. One hundred and two patients’ normal healthy males and females of the same age group and socioeconomic status from patient′s relatives were selected as control group. The controls were also thoroughly examined clinically. Those with cardio-respiratory, musculoskeletal, or endocrine diseases were excluded from the study. Fasting and postprandial blood glucose levels were measured by glucose oxidase method to rule out type 2 DM in them. Results: The comparison of fasting blood sugar (FBS) and Glycosylated hemoglobin (HbA1c) level among cases and controls. Mean FBS level of 197.50 among cases much higher than the control group which is 86.42. HbA1c levels also show the similar trend of having a higher mean value of 7.78 comparative to 4.34 among controls. The comparison of PFT among study and control group. Blood pressure variation among cases both in males and females. In our present study we have found that female cases are mostly normotensive (81% of total female cases) comparing to only 11% in male cases. Hypertension is more prevalent in male cases constituting 67% of all male cases, whereas only 5% female cases are hypertensive. Blood pressure is found to be in pre hypertension range in 14% female cases and 22 % of male cases. The mean FVC in the control group is approximately 11.98% higher than in the study group. The mean FEV1 in the control group is approximately 12.30% higher than in the study group. The mean PEFR in the control group is approximately 6.89% higher than in the study group. The mean FEF 25%-75% in the control group is significantly higher, approximately 27.41% higher than in the study group. The mean FEV1/FVC ratio in the control group is approximately 6.12% higher than in the study group. Conclusion: Lung function is severely affected in type 2 diabetics patients indicating that lung is a target organ of long term complication of type 2 diabetes. Long term glycaemic control i.e. HbA1c is a major determinant of this deterioration rather than the duration of disease. Females are more prone to be affected than their male counterpart.