Background and aim Type 2 diabetes mellitus (T2DM) is associated with several infections due to hyperglycemia and impaired immunity. This study aims to analyze the clinical and microbiological profile of critically ill T2DM patients with sepsis due to gram-negative bacteria (GNB). Materials and methods A prospective cross-sectional observational study was conducted at Dr. D. Y. Patil Medical College, Hospital & Research Centre, Pune, India, between December 2023 and May 2024, after ethics committee approval. A total of 100 patients (50 T2DM cases and 50 nondiabetic controls), diagnosed with sepsis due to GNB and admitted to the medical ICU, were included in the study. The clinical profile and laboratory investigations of these patients were studied. Cultures were obtained from peripheral/central venous samples, tracheal secretions, and urine samples. Cultures from other specimens, such as ascitic fluid, cerebrospinal fluid, and pus from skin and soft tissue infections, were also obtained. The statistical tests that were applied were two-tailed with a 95% CI, and a p-value of less than 0.05 was considered statistically significant. Results The mean age of critically ill T2DM cases was 60.52 ± 12.88 years. Of the 50 T2DM cases, 28 were males and 22 were females. The most common infection in critically ill T2DM patients was bloodstream infection (n = 21), followed by bronchopneumonia (n = 16) and urinary tract infections (n = 10). Escherichia coli (n = 15) and Klebsiella pneumoniae (n = 15) were the most common gram-negative pathogens isolated. The most common GNB isolated from the blood cultures of critically ill T2DM patients was Acinetobacter spp. (n = 6). The death rate was significantly higher in T2DM patients with GNB sepsis as compared to nondiabetic controls. Conclusion GNBs like E. coli, K. pneumoniae, and Acinetobacter spp. are commonly found in critically ill T2DM patients with sepsis. Bloodstream infection was the most common site of infection in critically ill T2DM cases. Acinetobacter spp. was the most common isolate found in the blood cultures of critically ill T2DM patients. It is important to identify the site of sepsis, isolate the organism, and treat it with appropriate antibiotics promptly in critically ill T2DM patients to improve the outcomes of these patients.