Introduction: Hepatitis C virus (HCV) is a major cause of chronic liver disease, cirrhosis and hepatocellular carcinoma(HCC). HCV infection and type 2 diabetes are two common disorders with a high impact on health worldwide. There is growing evidenceto support the concept that HCV infection is a risk factor for developing type 2 Diabetes Mellitus. Both insulin resistance and diabetes canadversely affect the course of chronic hepatitis C, and lead to poor response to antiviral therapy and increased incidence of Hepatocellularcarcinoma. Objective: The objective of the study was to assess the frequency of type 2 Diabetes mellitus in newly diagnosed chronichepatitis C patients presenting in Allied hospital Medical unit II during six month period. Design: Cross sectional study. Setting: Medicalunit-II, Allied Hospital, Faisalabad. Period: 01-08-2009 to 28-02-2010. Material and methods: All newly diagnosed patients of chronichepatitis C on the basis of PCR for HCV-RNA were included in the study. Fasting and two hours postprandial blood sample were tested.Diabetes Mellitus was labeled as per slandered. Results: Out of 180 patients with CHC 19 (10.6%) were found to have Diabetes mellituswhile 161(89.4%) were non-diabetics. Conclusions: There is close association in the development of type 2 diabetes mellitus in patientswith chronic hepatitis C.