The incidence of thyroid dysfunction in diabetic patients is higher than that of the general population. Undiagnosed thyroid dysfunction may affect the metabolic control and enhance cardiovascular and other chronic complication risks in diabetic patients. Few studies have examined the relationship between subclinical hypothyroidism (SCH) and vascular complications of type 2 diabetes. Objectives: To find out the relationship between SCH and vascular complications in patients with Type 2 diabetes. Subjects and Methods: Our cross sectional study included 110 patients with type 2 DM (45 males and 65 females) who were followed at the Diabetes outpatient Clinics in the state of Kuwait during 6 months period. All patients subjected to complete clinical and laboratory data, including thyroid function tests, total cholesterol (TC), triglyceride (TG), HDL-C, LDL-C, urinary albumin, fundus examination, ECG, and Glycosylated hemoglobin. Results: Among 110 patients, 21 (19.1%) Patients had SCH. Patients with SCH were more significantly older, with longer duration of diabetes, higher HbA1c, total cholesterol and LDL-C than euthyroid group. However, gender (p = 0.076), BMI (p = 0.092), and smoking (P=0.715) were not significantly different between the SCH and euthyroid groups. The SCH group had a higher prevalence of dyslipidemia (p = 0.017), diabetic nephropathy (p = 0.003) diabetic retinopathy (p = 0.004) and IHD (p =0.011) than the euthyroid group while no significant difference in the prevalence of diabetic neuropathy (p=0.420). Conclusions: SCH is a common endocrine disorder in patients with Type 2 diabetes. It could be associated with a higher prevalence of vascular complications in type 2 diabetes. We could not prove a relation between SCH and diabetic neuropathy.