Thyroid diseases and type 2 diabetes mellitus are the two most common endocrine disorders encountered in clinical practice. Diabetes mellitus and thyroid disorders are shown to mutually influence each other. The present study was done to assess and compare the thyroid function tests in diabetes mellitus patients and normal healthy volunteers. This is a cross-sectional, age-matched, comparative, hospital based study. Type 2 Diabetes mellitus patients without hypothyroidism attending the medicine outpatient department (OPD) or admitted in the medicine wards were screened and then included as cases (30 patients). The normal healthy volunteers without diabetes mellitus or hypothyroidism were screened and included for control group (30 Patients). In this study the mean and standard deviation (S.D.) of thyroid stimulating hormone (TSH) was statistically, significantly higher in the diabetes mellitus group (5.48±2.32 mIU/dl), when compared to control group (2.91±1.44 mIU/dl). This sub clinical hypothyroidism leads to dyslipidemia. The results also showed elevated total cholesterol, low density lipoprotein (LDL) in diabetes mellitus group, when compared to control group. Thus, subclinical hypothyroidism in type 2 diabetes mellitus can aggravate the classical risk factors such as hypertension and dyslipidemia, arising from an undiagnosed thyroid dysfunction and can lead to an increased cardiovascular risk in these patients.