Data on the prevalence of obstructive sleep apnea in subjects with type 2 diabetes mellitus in China is scarce. We conducted a multi-centre, cross-sectional study involving 12 hospitals from six regional cities to investigate the prevalence of obstructive sleep apnea in hospitalized patients with type 2 diabetes mellitus and to explore the association between obstructive sleep apnea and related risk factors, diabetic complications and comorbidities in China. Each hospital recruited at least 70 consecutive patients with type 2 diabetes mellitus who were admitted to the endocrinology ward. A total of 880 participants were enrolled and administered overnight sleep monitoring with a portable monitor (ApneaLink™, ResMed, San Diego, CA, USA); other information was collected from medical charts and a standardized questionnaire. In this study, 60.0% (95% confidence interval: 56.8%, 63.2%) of hospitalized patients in China with type 2 diabetes mellitus had comorbid obstructive sleep apnea (apnea–hypopnea index ≥ 5). Only 1.5% (eight of 528) of the patients with both conditions had been diagnosed previously with obstructive sleep apnea. The prevalence of moderate–severe (apnea–hypopnea index ≥ 15) and severe obstructive sleep apnea (apnea–hypopnea index ≥ 30) was estimated to be 25.6% (22.7, 28.5%) and 10.3% (8.3, 12.4%), respectively. Age, sex, body mass index, snoring, reported breath-holding in sleep or gasping or choking arousal, sleepiness, diabetes duration, hypertension, diabetic nephropathy and cardiovascular diseases history were correlated significantly with the severity of obstructive sleep apnea. In China, the prevalence of obstructive sleep apnea in hospitalized patients with type 2 diabetes mellitus is high. Routine screening for and treatment of obstructive sleep apnea is an important, but often neglected, part of the management of diabetes.