Background. Chronic hepatitis C virus (HCV) has become the global "epidemic" with an estimated 123 million people currently infected worldwide. As the same time diabetes is also rapidly emerging as a global health care problem that threatens to reach pandemic levels by 2030. Objective. To investigate the magnitude of HCV infection in type II diabetes as compared to controls. Methodology. A case control study design was conducted at Jimma University Specialized Hospital from May to June 2010. A total of 604 study subjects were included in this study. Sociodemographic and risk factor data were collected by questionnaire. From serum sample, HCVAb screening was done by rapid antibody screening test. Liver functioning tests and total cholesterol tests were done by Dr. Lange LP 800 spectrophotometer. Results. The prevalence of HCV in type II diabetes and nondiabetic controls was 9.9% and 3.3%, respectively. In multivariate analysis, HCV seropositives have high risk of developing diabetes as compared with seronegatives (AOR = 2.997, 95% CI: (1.08, 8.315)). Conclusion. In this study, we found a positive association between past HCV infection and type II diabetes. As we did not perform HCV RNA test, we could not assess the association with HCV viremia.