The purpose of this study was to evaluate pulmonary functions in patients with Type-2 diabetes mellitus and to determine their correlation with glycemic status of diabetes in Indian population. Forty Type-2 diabetic patients, aged 30-60 years, with diabetic duration of 1-20 years, were included in the study. FVC, FEV1, & FEV1% are recorded by Benedict's Roth spirometer. PEFR and MEP were recorded by Wright's Peak flow meter & Modified Black's apparatus. Glycemic status of subjects was determined by FBS & PPBS by Glucose oxidase & peroxidase methods. And results were analyzed by calculating Mean +/- SD, using Student's t test, and Pearson correlation. All the respiratory parameters are reduced in Type-2 diabetic patients compared to control of which FEV1, FEV1%, & MEP show very highly significant reduction (P=0.000). Lung functions are negatively correlated with glycemic status & duration of diabetes. (r = -0.390, & -0.342) Reduction in dynamic lung functions and its negative correlation to glycemic status might be due to respiratory muscle weakness as indicated by highly significant reduction in MEP. Hence strict glycemic control and breathing exercises to strengthen the respiratory muscles may improve lung function in diabetics.