The aims of present study were to evaluate the prevalence, risk factors, and prognostic significance of masked hypertension in diabetic patients. Using a cross-sectional design, 266 patients with documented type 2 diabetes mellitus and clinic blood pressure (BP) <140/90 mm Hg without antihypertension treatment were enrolled; 24-hour ambulatory BP monitoring was applied to evaluate mean 24-hour systolic/diastolic BP. Demographics, medical histories, and medications usage were obtained using questionnaire. Fasting venous blood was drawn for biochemical analysis. Approximately 26.5% of participants were diagnosed as masked hypertension with mean 24-hour systolic BP >130 mm Hg and/or mean 24-hour diastolic BP >80 mm Hg. Compared with those without masked hypertension, other than significantly higher mean 24-hour systolic/diastolic BP, patients with masked hypertension were more elderly, had higher serum glycated hemoglobin (HbA1c) and C-reactive protein (CRP) levels and higher prevalence of coronary heart disease (CHD). Multivariate regression analysis showed that aging, increased HbA1c and CRP levels, and prevalent CHD were independently associated with masked hypertension. Logistic regression analysis revealed that after adjusted for traditional risk factors including age, male sex, smoking status, low-density lipoprotein-cholesterol, CRP, clinic systolic BP, and HbA1c, masked hypertension remained independently associated with prevalent cardiovascular disease (CVD), with odds ratio of 1.31 and 95% confidence interval of 1.11 to 1.85. In summary, in diabetic patients, concurrent masked hypertension increases the odds of having CVD. Future randomized controlled trials are warranted to investigate whether screening and managing masked hypertension could reduce cardiovascular events in diabetic patients.