Background: Abnormality in liver function test parameters in patients with type 2 diabetes mellitus (T2DM) is common, but study comparing this association in patients with hypertensive diabetes is lacking. Aims and objective: To compare the liver function test parameters and its correlation with the lipids parameters in patients with T2DM and hypertension with diabetes. Materials and Methods: Two hundred patients were studied in the Department of Medicine, Gandhi Medical College and associated Hamidiya Hospital, Bhopal from January 2015 to June 2016. Patients were divided into Group A (n=100, patients having T2DM) and Group B (n=100, hypertensive diabetes mellitus patients). Detailed demographic, glycemic, lipid and thyroid function test parameters were estimated in all the study population. Data collected was analysed using SPSS ver.20 and p value of <0.05 was considered as significant. Results: Demographic parameters except age (p=0.0003) was comparable. Glycemic parameters were also comparable except HbA1c (p=0.021) and average blood glucose (p=0.022) level in both the groups. Liver function test parameters including alkaline phosphate, bilirubin direct, bilirubin total, bilirubin indirect, gamma-glutamyl transpeptidase (GGT), aspartate aminotransferase (SGOT) and alanine aminotransferase (SGPT) were insignificantly higher in Group A compared to Group B (p>0.05). However, bilirubin direct, GGT, SGOT and SGPT were higher than the normal range in Group A. Conclusion: Liver function test parameters such as bilirubin direct, GGT, SGOT and SGPT were higher in patients with T2DM but comparable with patients with hypertensive diabetes mellitus (p>0.05).