Purpose. The study was aimed to investigate the frequency of diabetes mellitus type 2 in patients infected with chronic hepatitis C virus and its association with cirrhosis. Patients and Methods. This prospective case series was conducted at Section of Gastroenterology and Hepatology, Isra University Hospital, Hyderabad, over a period of 4 months from June 2009 to October 2009. Hepatitis C virus seropositive patients who were older than 18 years, diabetic or nondiabetic, were included. Basic demographic data collected by questionnaire and laboratory investigations including fasting blood glucose levels, serum cholesterol, and liver function tests were done. A logistic regression model was used to explore the association between diabetic and nondiabetic HCV seropositives and type 2 diabetes mellitus with cirrhosis. Results. A total of 361 patients with hepatitis C were analyzed; the prevalence of type 2 diabetes mellitus in HCV patients was 31.5%. Out of the total number of the participants, 58.4% (n = 211) were cirrhotics, while 41.6% (n = 150) were noncirrhotic HCV seropositives. In multivariate analysis, cirrhotic patients appeared significantly more likely (P = 0.01) to be diabetic as compared with noncirrhotic patients (OR = 2.005, 95% CI: 1.15, 3.43). Conclusion. Advancing age, increased weight, and HCV genotype 3 are independent predictors of type 2 diabetes in HCV seropositive patients, and there is a statistically significant association of cirrhosis observed with type 2 diabetes mellitus.