Abnormal gas exchange is an important hallmark of various forms of ILD. And Diffusion capacity is an important index of gas exchange and physiological severity in these disorders. Our study aims to find out the correlation between diffusing capacity and six minute walk test parameters and alveolar arterial gradient in patients with interstitial lung disease . A total of 50 willing and stable patients clinicoradiologically suggestive of ILD were selected. All patients underwent complete clinical workup including DLCO ,six minute walk test and ABG . The Mean DLCO (%) was 59.76 ± 19.36. Mean 6MWD (m), Mean End test SPO₂ (%),Mean BORG scale at the end of test and Mean PA– aO₂ were,271.98 ± 95.29, 88.8 ± 4.12, 2.54 ± 0.61and 34.9 ± 9.11 respectively. We observed a significant strong positive correlation between DLCO and end test saturation and PaO2. Significant moderate positive correlation between DLCO and walk distance and FVC. Significant moderate negative and weak negative correlation between DLCO and alveolar arterial gradient and borg scale respectively. Correlation with FEV1 was not significant. Where DLCO facilities not easily available, one can rely on initial and serial measurement of six minute walk test parameters, alveolar arterial gradient.