Background: Thyroid dysfunction (TD) is frequently observed in patients with type 2 diabetes mellitus (T2DM) and may influence glycemic control. Despite growing evidence globally, data from Bangladesh remain limited. Objective: To evaluate the prevalence of thyroid dysfunction and its association with glycemic and clinical parameters among T2DM patients attending a tertiary care hospital. Materials and Methods: A cross-sectional observational study was conducted from January to December 2025 in 120 T2DM patients at Jalalabad Ragib-Rabeya Medical College, Sylhet. Patients with type 1 diabetes, known thyroid disease, pregnancy, acute illness, or use of drugs affecting thyroid function were excluded. Demographic and clinical data, including age, sex, duration of diabetes, BMI, and blood pressure, were collected. Fasting blood glucose, 2-hour postprandial glucose, HbA1c, serum creatinine, FT3, FT4, and TSH were measured. TD was defined by abnormal thyroid hormone levels (FT3, FT4, TSH). Data were analyzed using t-tests, Chi-square tests, and Pearson’s correlation, with p < 0.05 considered significant. Results: TD was observed in 50% of patients, more frequent in males (61.7%) than females (38.3%). Hypothyroidism (38.3%) predominated over hyperthyroidism (11.7%). T2DM patients with TD had significantly higher TSH levels (7.27 ± 5.25 vs 2.31 ± 1.48 µIU/mL; p < 0.001), while other biochemical parameters were comparable. HbA1c positively correlated with TSH (r = 0.307; p = 0.001). Conclusion: Thyroid dysfunction is common among T2DM patients and is associated with poor glycemic control. Routine thyroid screening may aid in better diabetes management.