Background: Diabetes mellitus poses a significant global health challenge, with Type 2 Diabetes Mellitus (T2DM) being particularly prevalent and on the rise, especially in low and middle-income countries. Liver enzymes, such as aspartate aminotransferase (AST), alanine aminotransferase (ALT), and γ-glutamyl transferase (GGT), are vital indicators of liver health and metabolism, often showing elevated levels in individuals with diabetes. Despite the public health importance of this relationship, comprehensive research, especially in Bangladesh, remains limited. This study aimed to address this gap by evaluating liver enzyme levels and their correlation with T2DM. Objective: The objective of this study was to assess the frequency of elevated liver enzymes and their association with T2DM. Method: A cross-sectional study was conducted in a tertiary hospital in Dhaka from May to August 2023. The study included 192 participants with T2DM and an equal number of control participants without diabetes. Liver enzymes (AST, ALT, and GGT) were measured, and statistical analysis was performed using independent t-tests. Results: The study found that persons with Type 2 Diabetes Mellitus (T2DM) had significantly higher levels of Aspartate Aminotransferase (AST) and Alanine Aminotransferase (ALT) compared to the control group (p < 0.001). Nevertheless, there was no substantial disparity in GGT levels seen between the two groups (p = 0.065). Individuals with T2DM had a considerably higher mean fasting blood glucose level compared to controls (p < 0.001). The liver function test results of the participants with type 2 diabetes mellitus (T2DM) were substantially higher compared to the control group. The serum alanine aminotransferase (ALT) level was 46.06 ± 22.38 IU/L and the serum aspartate aminotransferase (AST) level was 42.94 ± 19.08 IU/L, with a p-value of less than 0.001. However, there was no significant association between the gamma-glutamyl transferase (GGT) level in both study groups, with a p-value of 0.065. Conclusion: Elevated levels of AST and ALT are common in individuals with T2DM, indicating potential liver dysfunction. Liver enzyme testing may serve as a valuable tool in the assessment and management of diabetes-related complications.