Aims: 1. To study the levels of Apolipoprotein A-I and activity of Lecithin cholesterol acyl transferase (LCAT) in newly detected type 2 Diabetes Mellitus. Study Design: Cross sectional study. Place and Duration of Study: Department of Biochemistry and Department of Medicine, Belgaum Institute of Medical Sciences (BIMS), Belgaum, Karnataka, India, between November 2011 and June 2013. Methods: Study included 100 patients (50 men, 50 women, age range 30-60 years) with newly detected type 2 Diabetes Mellitus and 100 age and sex matched healthy participants. LCAT activity was assessed by measuring the difference between esterified and free cholesterol. Determination of free and esterified cholesterol was done by using digitonin precipitation method. Apolipoprotein A-I was measured by immunoturbidemetric method using semi auto analyzer. HDL cholesterol level was measured by CHOD-POD method. Original Research Article British Journal of Medicine & Medical Research, 4(14): 2653-2660, 2014 2654 Results: The mean±SD value of various parameters in newly detected type 2 Diabetes Mellitus was HDL cholesterol(33.37±4.44mg/dl), Apolipoprotein A-I(133.10±24.22mg/dl), and LCAT activity(59±9.86 IU/L), versus HDL cholesterol(48.76±16.84mg/dl), Apolipoprotein A-I(188.72±19.49mg/dl) and LCAT activity (91.74±6.50IU/L) in controls. LCAT activity, Apolipoprotein A-I and HDL levels were significantly (p < 0.01) decreased in patients with newly detected type 2 Diabetes Mellitus when compared with healthy participants. Conclusion: The reduced LCAT activity, Apolipoprotein-A-I and HDL cholesterol may be associated with a reduction in Reverse cholesterol transport(RCT) and contribute to the development of atherosclerosis in newly detected type 2 Diabetes Mellitus.