Introduction Type 2 diabetes mellitus (T2DM) is the most common problem in postmenopausal women. This study aimed to find out the prevalence of T2DM and its risk factors in postmenopausal women. Methods The study is a population-based cross-sectional study. Anthropometric measurements, blood pressure, and biochemical measurements of 2295 postmenopausal women up to the age of 55 years were taken following face-to-face interviews. Odds ratio was used to find out the role of risk factors associated with T2DM. Results Prevalence of T2DM was reported to be 15.51%. Significant contribution of waist circumference (WC) followed by body mass index (BMI), total cholesterol (TC), and triglycerides (p<0.05) was noted in increasing the risk of T2DM. No association was found between T2DM and hypertension (p>0.05). Conclusion A high prevalence of T2DM was reported in postmenopausal women. Higher levels of BMI, WC, TC, and triglycerides were found to be the major risk factors for T2DM.