Background: Carpal tunnel syndrome (CTS) is a constellation of symptoms and signs resulting from the local compression of the median nerve inside the carpal tunnel at the wrist. In advanced cases of CTS where the course is unnoticed, atrophy of the thenar muscles may occur, which can be irreversible. Objective: The aim of the present study was to estimate prevalence and severity of CTS in patients with type 2 diabetes mellitus in South Western region of the Kingdom of Saudi Arabia (KSA) and to identify specific at risk groups within these populations by using nerve conduction study. Methods: This cross-sectional study was conducted in Asir Central Hospital, Abha, KSA. The study randomly included all patients with type 2 diabetes mellitus with their place of birth and permanent residence being in Abha or Mohyel cities. History, physical examination, and laboratory data about fasting blood glucose, HbA1c, and lipid profile were collected. Additionally, nerve conduction study of both hands was performed. Results: Out of 131 included subjects, 107 patients (81.7%) had CTS. Approximately one-third (35.1%) of the study subjects had unilateral CTS, and it affected both hands in 46.6% of them. In the majority of cases CTS was of very mild or mild severity (27.5% and 26.7% respectively). A significant association was found between gender, hypertension, hypothyroidism, ischemic heart disease and the development of CTS. Conclusion: High prevalence of unilateral and bilateral CTS was found among patients with type 2 diabetes mellitus in South Western Saudi Arabia. Different grades of CTS were detected, but the severity of functional impairment was relatively mild. Development of CTS was associated with hypertension, ischemic heart disease, and hypothyroidism. Health care professionals should be aware of this high prevalence, and it will be useful to perform electrodiagnostic studies in diabetic patients in whom CTS is suspected.