Introduction: Obesity is chronic progressive disease which is often difficult to treat. The cause of obesity is complex and multifactorial. Obesity among type 2 DM patients increases the risk of cardio vascular disease and overall mortality from diabetes. However, there is a limited study in Ethiopia to define the prevalence and associated factors of obesity among clinical patients of diabetes mellitus. Objective: To assess the prevalence and associated factors of obesity among type 2 diabetes mellitus patients attending Felege Hiwot Referal Hospital,Bahir Dar, Northwest Ethiopia. Methods: Institution based cross sectional study was carried out among 297 type 2 diabetic mellitus patients attending Felege Hiwot Referral Hospital, Bahir Dar. Systematic random sampling technique was used to select study units. Body mass index was assessed and obesity was defined based on World Health Organization (WHO) classification of obesity. Data was collected using interview administered questionnaire and physical measurement like height and weight were measured with calibrated equipment. Association of obesity and patient characteristics was assessed using logistic regression. Statistical significance was determined using odds ratio (OR), with 95% CI at p value<0.05. Result: The overall prevalence of obesity according to WHO (Body Mass Index ≥30) classification was 14.3%.Monthly income (AOR=7.1; 95% CI: 1.66, 30.5), alcohol intake (AOR=3.29; 95% CI: 1.22, 8.88), dietary practice (AOR=4.2; 95% CI: 1.8, 9.7) and insulin (AOR=2.76; 95% CI: 1.2, 6.3) were significantly associated with obesity. Conclusion: Obesity is most common comorbidity among type 2 diabetic mellitus patients. The study showed that obesity has a significant association with insulin ,monthly income, dietary practice and alcohol intake. Therefore, interventions should focus on changing dietary practice and behavior towards alcohol consumption .Besides, interventions should focus on high income patients and patients taking insulin.