Aim: We studied the effect of the addition of an oral nutrition supplement (ONS) on the rate of hypoglyemia among hospitalized type 2 diabetes mellitus (DM) patients. Methods: In this retrospective analysis, all DM patients with hypoalbuminemia (albumin < 3.5 g/dL) admitted to internal medicine “E” at Wolfson Medical Center between 1 June 2016 and 30 April 2017 were included. One bottle of ONS (Glucerna, 330 KCAL, 28 g carbohydrates, 17 g protein, 17 g fat) was added to the morning meal. The consumption of the ONS was verified during the morning rounds. All glucose measurements were recorded automatically in the patients’ electronic medical records. A logistic regression model was used to evaluate the effect of the nutrition support on the occurrence of hypoglycemia. Results: 218 patients (mean age 77.4 ± 12.0 years, 63.3% female, mean albumin 3.13 ± 0.32 g/dL), of whom 27.9% had documented hypoglycemia during hospitalization were included. The patients consumed 69.5% ± 37.1 of the ONS provided, and ONS was started 4.3 ± 5.3 days from admission. A logistic regression model indicated that age (Odds ratio [OR] 1.048, 95% CI 1.014–1.083, p = 0.005), insulin treatment (OR 3.059, 95% CI 1.497–6.251, p = 0.002), and the day of ONS started from admission (OR 1.094, 95% CI 1.021–1.173, p = 0.011) were associated with an increased risk of hypoglycemia. Complete consumption of the ONS was associated with a reduced risk of hypoglycemia: OR 0.364, 95% CI 0.149–0.890, p = 0.027. Age, other DM medications and serum albumin did not affect the risk. Conclusion: The intake of a complete serving of ONS may be associated with a reduction of the risk of hypoglycemia among diabetes in-patients with hypoalbuminemia.