Objective: Diabetes is a systemic disorder; over the course of time it affects almost every vital organ and ranked among the leading causes of mortality. Approximately 20% - 30% of diabetic individuals develop complications in kidney. The aim of study is to evaluate DNA methylation status of promoter region in CpG island of TGFβ-1 gene and its association with circulatory TGFβ-1. Methods: A total of 98 subjects including 37 T2DM, 22 DN and 39 healthy controls were recruited in study. Circulatory TGFβ-1 levels were measured by ELISA and DNA methylation study was performed using methylation specific PCR. Results: About 32.43% patients with T2DM and 27 .27% patients with DN had tobacco chewing habit. Systolic pressure was found significantly increased in both diseased groups as compared to control (p = 0.006 and 0.001 respectively) while diastolic pressure was significantly increased only in DN group (0.002). HbA1c was significantly decreased in T2DM and DN group while serum creatinine was significantly raised in DN group. Circulatory levels of TGFβ-1 were significantly higher with mean value 256.07 ± 62.72 ng/ml in T2DM (p = 0.006) and 349.81 ± 76.12 ng/ml in DN (< 0.0001) as compared to control (213.06 ± 69.57 ng/ml). ROC analysis of TGFβ- 1 showed 81.8% sensitivity, 77.6% specificity at cut off value 297.5 ng/ml and area under curve was 87.0. TGFβ-1 had significant correlation with serum creatinine (p = 0.044) and HbA1c (p = 0.037). About 68.18% patients with DN group, 13.51% DM patients had hypomethylation in CpG island which was significantly (p = <0.001) associated with DN. Conclusion: Therefore, methylation status of TGFβ-1 gene promoter can be better predictor for progression of nephropathy in patients with T2DM.