BACKGROUND: Diabetes is linked with depression, but screening rates for depression are low, indicating a need for periodic assessments among those with diabetes. The study aimed to determine depression prevalence and associated factors in persons with type 2 diabetes mellitus (T2DM) in an urban primary care setting of Karnataka, as well as implementation challenges in depression screening for persons with T2DM as perceived by healthcare providers. MATERIAL AND METHODS: A mixed-methods study was performed for 6 months in 2022–2023 at an Urban Primary Health Centre (UPHC) in Bengaluru. The sample size was calculated to be 110, and convenience sampling was applied to select persons with T2DM. The participants were screened for depression using Patient Health Questionnaire-9. Key informant interviews were performed among various health care providers of the UPHC. Data were captured using EpiCollect Version 5.0. Univariate logistic regression was performed to find the factors associated with depression. RESULT: Of the 110 participants, 60 (54.5%) screened positive for depression. Men had 0.474 (95% Confidence Intervals—CI: 0.126, 1.782) lesser odds of depression when compared with women (P = 0.269). Those with comorbidities had 1.975 more odds (95% CI: 0.538, 7.252) when compared with absence of comorbidities (P = 0.305). Statistically significant associations were not found with any of the factors. Key facilitators for screening were willingness to implement screening, empathetic attitude, and awareness of mental health, whereas the challenges included lack of training in mental health assessment and patient reluctance to adhere to treatment due to stigma. CONCLUSION: The study found that 54.5% of persons with T2DM seeking heath care at the UPHC screened positive for depression. Several challenges in implementing depression screening for T2DM in primary care settings were noted.