This study aimed to determine the occurrence of antibiotic resistance genes for β-lactamases; blaTEM and blaCTX-M in uropathogenic Escherichia coli isolates from urinary tract infection (UTI) suspected diabetic and nondiabetic patients. A hospital-based cross-sectional study was conducted in Kathmandu Model Hospital, Kathmandu, in association with the Department of Microbiology, GoldenGate International College, Kathmandu, Nepal, from June to December 2018. A total of 1,267 nonduplicate midstream urine specimens were obtained and processed immediately for isolation of uropathogens. The isolates were subjected to antibiotic susceptibility testing and extended spectrum β-lactamase (ESBL) confirmation. In addition, blaTEM and blaCTX-M genes were detected using specific primers. The overall prevalence of UTI was 17.2% (218/1,267), of which patients with diabetes were significantly more infected; 32.3% (31/96) as compared with nonpatients with diabetes, 15.9% (187/1,171). A total of 221 bacterial isolates were obtained from 218 culture-positive specimens in which E. coli was the most predominant; 67.9% (150/221). Forty-four percent (66/150) of the total E. coli was multidrug resistant and 37.3% (56/150) were ESBL producers. Among 56 isolates, 92.3% (12/13) were from patients with diabetes, and 83.0% (44/53) were from nondiabetics. Furthermore, 84.9% of the screened ESBL producers were confirmed to possess either single or both of blaTEM and blaCTX-M genes. The blaTEM and blaCTX-M genes were detected in 53.6% and 87.5% of the phenotypically ESBL confirmed E. coli, respectively. Higher rates of ESBL producing uropathogenic E. coli are associated among patients with diabetes causing an alarming situation for disease management. However, second-line drugs with broad antimicrobial properties are still found to be effective drugs for multidrug resistance strains.