Objective: Objectives of our study were to compare liver markers in type 2 diabetic patients with that in non-diabetic healthy volunteers, and also to find the correlation between insulin resistance and liver markers. Methods: The cross-sectional study was conducted in the Clinical Biochemistry laboratory. 114 type 2 DM patients in the age group 18-65 years, diagnosed as per ADA guidelines were included in the study. 100 age and gender matched non-diabetics, healthy volunteers or those having health packages were chosen as controls. Blood sample was collected and fasting blood glucose, AST, ALT and Alkaline phosphatase, total bilirubin, direct bilirubin, total protein, albumin and insulin were estimated. HOMA-IR was calculated. Statistical analysis was carried out using SPSS 16. Results: A significant elevation was seen in AST, ALT, ALP, GGT, TB, DB, TP, A:G ratio and insulin levels in diabetics. A lowered albumin and A:G ratio were observed in diabetics compared to controls. A positive relationship was seen between insulin resistance (HOMA-IR) and ALP, total and direct bilirubin. A very significant negative correlation was revealed between albumin and HOMA- IR. Conclusion: We conclude that diabetic patients had high liver enzymes as compared with non-diabetics. A correlation was found between type 2 diabetes mellitus, liver markers and insulin resistance.