Purpose: This current study was done to find out the prevalence and severity of dry eyes in patients of type 2 diabetes and also to study the association of dry eyes with the stages of diabetic retinopathy. Methods: This is a hospital based prospective cross sectional observational study involving 382 patients attending the ophthalmology OPD and in-patient department at R L Jalappa Hospital attached to Sri Devaraj Urs Medical college, Tamaka, Kolar from December 2017 to May 2019. Results: In the present study majority of the patients (58.6%) were males. Most of the patients (30.8%) were aged more than 66 years with 46% of patients had duration of diabetes for more than five years The results of the present study showed 35.3% prevalence of dry eye syndrome among patients with type 2 diabetes mellitus. Among 135 patients with dry eye 79.2% had dry eye severity of grade 1 or 2 who were classified according to DEWS I criteria. Conclusion: Dry eye syndrome in patient with type 2 diabetes mellitus was significantly associated with increasing age and longer duration. Also there was significant association of diabetic retinopathy noted with dry eye disease severity. Keywords: Diabetes mellitus; Dry eye disease; Diabetic retinopathy; Schirmer’s test; Tear film break up time; Dry Eye Workshop 1(DEWS 1).