Purpose: The purpose of this study was to investigate the knowledge of diabetes and insulin use in patients with type 2 diabetes. Method: Participants (139) were recruited from the endocrinology outpatient department of a tertiary care hospital in an urban city. Knowledge of diabetes knowledge was measured by a brief diabetes knowledge test which had two components: a 14-item general test and a 9-item insulin-use subscale. Result: The average scores for knowledge of diabetes and insulin were 62.4 and 41.8 respectively. Scores were lower for items on the definition of glycosylated hemoglobin, diabetic diet, signs of ketoacidosis, and insulin reaction compared to other items. Knowledge scores were significantly lower for older participants, those who had lower levels of education, those who did not have a spouse, those who did not have a job, those who were not being treated with insulin, and those who tested their blood glucose less than 3 times a day. Conclusion: Definition of glycosylated hemoglobin, diabetic diet, signs of ketoacidosis, and insulin reaction should be included in education for patients with type 2 diabetes. Special education programs should be developed for elderly people, those with low levels of education those without a spouse, or without a job, or who are not being treated with insulin.