Background: Obesity in type 2 diabetes patients is a serious health issue by itself; it is also associated with other health problems including psychiatric illnesses. The psychological effects of dieting and weight loss have been a matter of controversy in the field of obesity management. Objective: The aim of this study was to compare the impact of weight loss because of aerobic exercise training and dietary measures on psychological wellbeing and biochemical modulation in obese type 2 diabetes patients. Material and methods: One hundred obese type 2 diabetes patients of both sexes participated in this study, and were included into two equal groups. The first group (A) received aerobic exercise training, three sessions per week for three months combined with dietary measures. The second group (B) received no training intervention for three months. Results: There was a significant decrease in body mass index (BMI), leptin, total cholesterol (TC), low density lipoprotein cholesterol (LDL-c), triglycerides(TG), homeostasis model assessment-insulin resistance-index (HOMA-IR) , beck depression inventory (BDI ) & profile of mood states(POMS) and increase in high density lipoprotein cholesterol (HDL-c) & Rosenberg self-esteem scale (RSES) of group (A) after treatments, but the changes of group (B) were not significant. Moreover, there were significant differences between mean levels of the investigated parameters of group (B) and group (A) at the end of the study. Conclusion: Physical training and dietary measures can be used as methods of choice for psychological wellbeing and biochemical modulation in obese type 2 diabetes patients.