It has been well-documented that chronic arsenic exposure can lead to skin lesions, atherosclerotic diseases and cancers. The findings of association between arsenic exposure and diabetes mellitus indicate additional risk to human health. However, some studies reported inconsistent association. The aim of this study was to assess the association of chronic arsenic exposure through drinking water with risk of type 2 diabetes mellitus. To this end, a cross-sectional study was conducted among randomly selected 300 individuals aged 30 years and older in Comilla and Jhenaidah District of Bangladesh. Individuals with arsenic-related skin lesions were defined as subjects exposed to arsenic. This study included 150 exposed subjects and recruited from Comilla district where drinking water (groundwater) is heavily contaminated with arsenic. Likewise, 150 subjects unexposed to arsenic were recruited as reference population from Jhenaidah district where groundwater is known not to be contaminated by arsenic. Diabetes was defined if fasting blood glucose (FBG)>6.1 mmol/L following World Health Organization (WHO) guidelines. The common odds ratio for diabetes mellitus among subjects exposed to arsenic was 3.5 (95% confidence interval 1.1-10.9). After adjustment for age, sex and BMI, the Mantel-Haenszel weighted prevalence ratio was 3.5(95% CI: 1.1-11.1), 3.7(95% CI: 1.1-11.8) and 4.4(95% CI: 1.1-17.2) respectively. The indicated relationships were significant (P<0.05). These observations suggested that chronic arsenic exposure through drinking water maybe a risk factor of type 2 diabetes mellitus.