Diabetes mellitus (DM) has emerged as a major public health problem in India. Diabetic nephropathy have higher prevalence of thyroid disorder when compared with diabetes mellitus. The present study compared the levels of thyroid hormones between type 2 diabetes mellitus with and without diabetic nephropathy. Among 192 diabetes mellitus patients those who have nephropathy, euthyroid was 124(64.6%), low T3 was 14(7.3%), subclinical hypothyroidism was 36(18.8%) and overt hypothyroidism was 18(9.4%) and other 192 patients those who haven’t nephropathy, euthyroid was 159(82.8%), low T3 was 7(3.6%), subclinical hypothyroidism was 11(5.7%) and overt hypothyroidism was 15(7.8%). We found a statistically significant correlation between TSH and urine protein creatinine ratio (urine PCR). Routine assessment of thyroid hormones in patients will help to improve general wellbeing and reduce the mortality risk.