Objective: In order to promote physical activity (PA) in patients with complicated type 2 diabetes, a better understanding of daily movement is required. We (1) objectively assessed PA in patients with type 2 diabetes, and (2) studied the association between muscle mass, dietary protein intake, and PA. Methods: We performed cross-sectional analyses in all patients included in the Diabetes and Lifestyle Cohort Twente (DIALECT) between November 2016 and November 2018. Patients were divided into four groups: <5000, 5000–6999, 7000–9999, ≥ 10,000 steps/day. We studied the association between muscle mass (24 h urinary creatinine excretion rate, CER) and protein intake (by Maroni formula), and the main outcome variable PA (steps/day, Fitbit Flex device) using multivariate linear regression analyses. Results: In the 217 included patients, the median steps/day were 6118 (4115–8638). Of these patients, 48 patients (22%) took 7000–9999 steps/day, 37 patients (17%) took ≥ 10,000 steps/day, and 78 patients (36%) took <5000 steps/day. Patients with <5000 steps/day had, in comparison to patients who took ≥10,000 steps/day, a higher body mass index (BMI) (33 ± 6 vs. 30 ± 5 kg/m2, p = 0.009), lower CER (11.7 ± 4.8 vs. 14.8 ± 3.8 mmol/24 h, p = 0.001), and lower protein intake (0.84 ± 0.29 vs. 1.08 ± 0.22 g/kg/day, p < 0.001). Both creatinine excretion (β = 0.26, p < 0.001) and dietary protein intake (β = 0.31, p < 0.001) were strongly associated with PA, which remained unchanged after adjustment for potential confounders. Conclusions: Prevalent insufficient protein intake and low muscle mass co-exist in obese patients with low physical activity. Dedicated intervention studies are needed to study the role of sufficient protein intake and physical activity in increasing or maintaining muscle mass in patients with type 2 diabetes.