Type 2 diabetes mellitus (T2DM) accompanied by hyperlipidemia confers higher risk for diabetes as well as cardiovascular diseases. NF-κB is actively involved in generating low-grade inflammation and oxidative stress triggering the development of diabetic complications. In this study, we have attempted to investigate the association between NF-κB1 functional promoter polymorphism-94 ATTG insertion/deletion (rs28362491) with inflammatory markers in developing diabetes-linked dyslipidemia. We performed a case-control study in a total of 401 individuals belonging to three categories such as Type 2 diabetes with dyslipidemia, Type 2 diabetes without dyslipidemia, and normal healthy controls. Experiments were carried out using genotyping, real-time PCR, and western blot. Pearson's correlation, analysis of variance, and logistic regression were utilized for statistical analysis. As per genetic association conducted in this study the SNP rs28362491 showed significant allelic and genotypic associations (Allelic: OR = 1.374, CI 0.9797-1.927, p = 0.003, and Genotypic in dominant model: OR = 1.77, CI 1.04-2.99, p = 0.002) with the risk of diabetes and associated dyslipidemia. The -94 ATTG insertion/insertion (ins/ins) genotype was associated with significantly increased level of serum TNF-α (p = 0.002), serum IL-6 (p = 0.067) in diabetes-induced dyslipidemia. Multiple linear regression analysis identifies independent correlation of Total cholesterol, HDL, LDL, TNF-α, and rs28362491 ATTG ins/ins with triglyceride in diabetic dyslipidemic condition. T2DM with dyslipidemia having ins/ins genotype showed significant increased expression of pro-inflammatory cytokines such as TNF-α, IL-6, and activation of NF-κB. Our study reports that individuals with ATTG insertion allele and ATTG ins/ins genotype at NF-κB1 promoter regulatory gene predicts the risk and severity of T2DM-linked dyslipidemia.