Background: Sitagliptin is a dipeptidyl–peptidase inhibitor (DPP–4 inhibitor) Like other DPP–4 inhibitors its action is mediated by increasing levels of the incretin hormones glucagon–like peptide–1 (GLP–1) and gastric inhibitory polypeptide (GIP). The study was aimed to evaluate the effect of sitagliptin on lipid profile in patients with type–2 Diabetes Mellitus at 0 level and after 16 weeks of treatment with sitagliptin. Material and Methods: A prospective study comprising 70 diagnosed cases of type 2 diabetes mellitus was carried out. These patients were put on sitagliptin 100 mg OD for 16 weeks and venous blood samples were taken at 0 level and after 16 weeks. Results The decrease in mean serum cholesterol levels at 0 week and 16 weeks was 17.84mg/dl (6.64%) . The change in mean serum triglycerides level was 42.30mg/ dl (18.75%). On Statistical analysis, the reduction in serum cholesterol levels and in serum triglycerides levels in total number of patients was highly significant (p<0.001). The mean increase in serum high density lipoprotein cholesterol (HDL–C) level was 0.08 mg/dl and mean% increase in HDL–C level was 0.25% at 4 months from baseline. On statistical analysis the increase in mean serum HDL–C level in study group was non–significant (p 0.223). Conclusions: The study concludes that Sitagliptin represents a substantial advance in antidiabetic therapy and it helps in improving the lipid profile of type 2 diabetes patients.