Although shortened telomeres were shown associated with several risk factors of diabetes, there is lack of data on their relationship with mitochondrial dysfunction. Therefore, we compared the relationship between telomere length and mitochondrial DNA (mtDNA) content in patients with type 2 diabetes mellitus (T2DM; n = 145) and in subjects with normal glucose tolerance (NGT; n = 145). Subjects were randomly recruited from the Chennai Urban Rural Epidemiology Study. mtDNA content and telomere length were assessed by Real-Time PCR. Malonodialdehyde, a marker of lipid peroxidation was measured by thiobarbituric acid reactive substances (TBARS) using fluorescence methodology. Adiponectin levels were measured by radioimmunoassay. Oxidative stress as determined by lipid peroxidation (TBARS) was significantly (p < 0.001) higher in patients with T2DM compared to NGT subjects. In contrast, the mean telomere length, adiponectin and mtDNA content were significantly (p < 0.001) lower in patients with T2DM compared to NGT subjects. Telomere length was positively correlated with adiponectin, HDL, mtDNA content and good glycemic/lipid control and negatively correlated with adiposity and insulin resistance. On regression analysis, shortened telomeres showed significant association with T2DM even after adjusting for waist circumference, insulin resistance, triglyceride, HDL, adiponectin, mtDNA & TBARS. mtDNA depletion showed significant association with T2DM after adjusting for waist circumference and adiponectin but lost its significance when further adjusted for telomere length, TBARS and insulin resistance. Our study emphasizes the clustering of accelerated aging features viz., shortened telomeres, decreased mtDNA content, hypoadiponectinemia, low HDL, and increased oxidative stress in Asian Indian type 2 diabetes patients.