Objective To determine the frequency of people at risk of developing diabetes mellitus type 2 (DMT2) and their risk of developing the disease over the next five years, using the Australian type 2 diabetes risk assessment (AUSDRISK) tool. Methods A cross-sectional study was done involving 152 adults; both males and females were randomly selected from city populations in Rawalakot and Muzaffarabad of the Azad Kashmir, irrespective of weight, family history and dietary habits. Patients with the apparent clinical features of DMT2 were excluded from the study. Data were collected over a nine-month period from April 2017 using an interviewer-administered questionnaire based on the AUSDRISK tool. Results Statistical analysis was done using SPSS version 23.0 (IBM, Armonk, NY, USA). Descriptive statistics were used to calculate the frequencies and percentages. Fifty-four (35.5%) participants had a low risk, 88 (57.9%) had an intermediate risk, and 10 (6.6%) had a high risk of developing DMT2 over the next five years. Conclusion Most of the city occupants had an intermediate-to-high risk of developing DMT2 (64.5%) over the next five years.