Background: The incidence of heart failure in diabetic subjects is high even in the absence of hypertension and coronary artery disease. Aims: The purpose of this study was to study the incidence of diastolic dysfunction in diabetic subjects and its relation to age, duration of diabetes mellitus (DM), Glycosylated hemoglobin (HbA1c) levels, obesity indices and diabetic microangiopathies. Settings and Design: This was a case control prospective study conducted at the teaching hospital during a one year period. Materials and Methods: A total of 127 subjects (case) with type 2 diabetes of more than five years duration were studied. Total 100 healthy subjects were included as the control group. Echocardiography was performed to assess left ventricular diastolic function. Results: Out of the total 127 subjects, 69 (54.33%) from the case group had diastolic dysfunction, and 11% amongst 100 in the control group population showed the diastolic dysfunction (P < 0.001). Patients with a longer duration of DM (of 11 to 15 years) had a higher prevalence of diastolic dysfunction (P < 0.02). Subjects with high waist circumference and high waist to hip ratio had statistically significant diastolic dysfunction with 'P' =0.001 and 'P' = < 0.02 respectively. Subjects with HbA1c > 7.5% had a higher prevalence of diastolic dysfunction than subjects with HbA1c < 7.5% (P < 0.02). Diastolic dysfunction was present in majority of the subjects with autonomic neuropathy and retinopathy. Conclusions: Present study reveals high incidence of diastolic dysfunction in asymptomatic diabetic; subjects and, this finding was correlated with the duration of diabetes, HbA1c levels, obesity indices and diabetic microangiopathies. We conclude that early diagnosis and institution of treatment will reduce morbidity and improve the outcomes, and prevent future heart failure.