Diabetic nephropathy is the leading cause of the end-stage renal disease (ESRD) worldwide, and it is estimated that ~ 20% of type 2 diabetic patients reach ESRD during their lifetime. The objective of the present study was to assess the drug utilization pattern, risk factors, and prevalence of diabetic nephropathy in patients with type 2 diabetes mellitus in a south Indian tertiary care hospital. A cross-sectional observational study was conducted on 613 subjects (254 with and 359 without diabetic nephropathy). Prevalence of diabetic nephropathy was measured, and risk factors for the development of diabetic nephropathy were determined by calculating odds ratios using graph-pad prism statistical software, and drug utilization pattern was assessed. Nephropathy was significantly higher in subjects who are married (98.8%, OR, 3.903; 95% CI, 1.125-13.54, P=0.0211), poorly educated (61%, OR, 0.3670;95%CI, 0.2635-0.5112, P<0.0001), house wives (44.4%, OR, 0.5492; 95% CI, 0.3432 - 0.8789, P=0.0120), rural residents (51.2%, OR, 0.3943; 95% CI, 0.2820-0.5513, P<0.0001) and risk factors were hypertension (37.44%, OR, 4.131; 95% CI, 2.687-6.350, P<0.0001), other diseases (36.51%, OR, 4.963; 95% CI, 3.202 -7.692, P<0.0001), Endocrine diseases (9.53%, OR, 2.460; 95% CI, 1.433- 4.224, P=0.0009), history of CVD (7.90%, OR, 17.20; 95% CI, 7.049- 41.95, P<0.0001), HbA1c (36.1%, OR, 3.380; 95% CI, 2.157- 5.295, P<0.0001), low HDL (23%, OR, 0.5961; 95% CI, 0.3572 - 0.9947 , P=0.0470), high FBS levels (29.3%, OR, 6.111; 95%CI, 1.283 -29.10, P=0.0113), high triglyceride levels (39.8%, OR, 0.6077; 95%CI, 0.3878 -0.9523, P=0.0293), high serum creatinine (28.3%, OR, 154.3; 95% CI, 37.92- 627.7, P<0.0001), duration of T2DM(5-10years 39.8%, OR, 2.653;95% CI, 1.778 - 3.958, & > 10 years 37%, OR, 3.606 ; 95% CI, 2.362-5.504, P<0.0001), physical inactivity(64.9%, OR, 0.5188;95% CI, 0.3727-0.7220 , P<0.0001), soft drinks occasionally (31.9%, OR, 2.253; 95% CI, 1.531-3.315, P<0.0001), habit of taking tea /coffee twice without sugar(42.3%, OR, 1.845; 95% CI, 1.094 to 3.112, P=0.0208) were significant risk factors for development of nephropathy. Metformin (47.05%), a combination of Glimepiride and Metformin (30.71%), a combination of insulin isophane and insulin regular (29.41%), teneligliptin (10.45%), insulin regular (9.80%) were the anti-diabetic medications mostly given to the T2DM patients with nephropathy. The present study revealed that the risk factors for the development of diabetic nephropathy were multiple.