Diabetes is a chronic illness significantly affecting health of population throughout the world. In Africa, about 19.8 million adults are affected by diabetes. Of these, more than 50% are from Nigeria, South Africa, Ethiopia and Tanzania. Knowledge is the greatest weapon in the fight against diabetes mellitus. Self-management of patients with type two diabetic mellitus (T2DM) largely depends on the knowledge, attitude and practices (KAP) of such people regarding the condition. The main objective of this study was to assess factors associated with KAP of type II diabetes (T2DM) patients attending Ambo University referral hospital, Oromia, Ethiopia. An institutional based cross sectional study was conducted among randomly selected 248 T2DM patients aged ≥30 years old from Ambo University Referral Hospital. Data regarding KAP of diabetic patients were collected using interview techniques. In addition, anthropometric data of the participants were collected and assessed using WHO guidelines. Descriptive statistics was used to set the KAP level among the respondents while logistic regression model was applied to test the association of type two diabetic patients' KAP with various independent variables. The mean of age among the respondents was 44 (±7.2) years. Of 248 respondents, 105 (42.3%) were from rural. Among the total 248 respondents, about 111 (44.8%), 117 (47.2%) and 121 (48.8%) were differentiated as not knowledgeable, having poor attitude and poor practice towards diabetes mellitus, respectively. Age, place of residence, level of education, average monthly income, history of diabetes and duration of living with diabetic mellitus were identified as factors affecting KAP towards diabetes. Both sex and occupational status were also factors affecting the knowledge level of T2DM patients. Furthermore, knowledge level was affecting both attitude and practice level of participants in the study area. This study found that there was a gap in KAP towards diabetes among T2DM patients in the study area. Therefore, a structured nutrition and health education should be given for T2DM patients through community based behavioral change communication (BCC) to improve the level of KAP towards diabetic mellitus in the study area.