This is a cross sectional hospital based study carried out at Om Hospital and Research Center Kathmandu, Nepal. In the study, 200 diabetic patients attending the hospital were taken as the subjects and we evaluated the urinary albumin excretion and other biochemical parameters (such as creatinine, total cholesterol, HDL cholesterol, LDL cholesterol), blood pressure and body mass index (BMI). Among these 200 patients with type 2 diabetes mellitus (DM), 52.0% were having high blood pressure. The proteinuria was present in 23.0% of the overall subjects but when it is categorized in hypertensive and non-hypertensive group, 30.7% of the diabetic patients with hypertension were having proteinuria. It has been found that males were having higher prevalence ofproteinuria (53.8%) than female (17.6%). There was significant difference in systolic blood pressure, diastolic blood pressure in nephropathy and without nephropathy group. Thus the nephropathy or the incidence of proteinuria was associated with obesity, high diastolic blood pressure and male sex. These data suggest that control of diabetes; hypertension should decrease the risk for proteinuria thus decreasing end stage renal disease (ESRD) and mortality from ESRD.