Background: Diabetes mellitus is associated with metabolic, cellular and blood changes.Hematological changes have been reported in diabetes and believed to play a major role in diabetes-associated complications. However, reports are contradicting and data on erythrocyte indices in patients with type 2 diabetic patients in the study area are scarce. In the present study we attempted to determine the relation between Erythrocyte Indices with glycemic status in Type 2 Diabetes Mellitus (T2DM). Materials and methods: In this cross sectional, observational study we studied lab reports of 234 patients who attended the outpatient department and admitted as inpatients in a tertiary care hospital over a period of three months. The study group had 170 patients with, and control group had 64 age and sex matched controls. Random blood glucose, glycated hemoglobin (HbA1c) and Erythrocyte Indices includingHemoglobin (Hb), Mean Corpuscular Volume (MCV), Mean Corpuscular Hemoglobin Concentration (MCHC), Mean Corpuscular Hemoglobin (MCH), Packed Cell Volume (PCV), Red Cell Distribution Width (RDW), and Red Blood Cell (RBC) count were measured. Results: Our study revealed no significant differences in majority of erythrocyte indices among T2DM cases and controls. However, there was statistically significant difference in RDW (13.40±7.25 fL vs 23.86±15.53 fL, p =0.0001) between T2DM cases and controls. T2DM, patient with poor glycaemic control (HbA1c ≥ 6.5 gm%) had higher Hb compared to T2DM with good (HbA1 <6.5 gm%) glycaemic control (13.74±2.13 vs 12.79±2.64, p=0.0249). Patient with RBS ≥200 mg/dl had higher Hb compared to patients with RBS <200 mg/dl(14.2±2.3 vs 13.1±2.3, p= 0.0029). Hb and RDW showed significant positive correlation (r=0.1889, p=0.01362) with RBS. Conclusions: The present study shows variations of erythrocyte indices in diabetic patient compared to controls. Hence, haematological changes should be evaluated in all T2DM for effective therapeutic intervention