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Diabetes mellitus has become a highly common noncommunicable condition. An in-depth understanding of the disease condition, its influencing factors, and effective management practices can provide numerous benefits to the diabetic population. Not only does it prevent the complications associated with diabetes, but it also helps people make informed decisions regarding the management choices and ensures better compliance. The study aims to determine the knowledge and practices regarding diabetes mellitus among the type 2 diabetic population.  Methods: The study design was cross-sectional, involving a total of 200 participants who attended the outpatient department (OPD) of the urban and rural field practice areas under ESIC Hospital, Hyderabad, Telangana. The study was conducted over two months. A semistructured, interviewer-administered questionnaire was prepared in the patient's preferred languages to evaluate the knowledge and practices of diabetes mellitus among the type 2 diabetic population. Statistical analysis was performed using IBM SPSS Statistics for Windows, Version 21 (Released 2012; IBM Corp., Armonk, New York, United States), with the statistical significance fixed at p-values less than 0.05.  Results: Our study found that the average age of the study population was 56.72, and most of them were males. The urban participants outnumbered the rural participants. The data obtained were compared between the urban and rural settings. We observed a statistically significant (p < 0.0001) relationship in the educational status of diabetic patients in the urban versus rural areas. The proportion of educated participants was higher in the urban areas. Similarly, the illiteracy rate was found in 10 (18.86%) and eight (5.44%) rural and urban participants, respectively, showing a higher proportion in the rural setting. In addition to this, the results revealed a significant (p = 0.0214) link between the perceived risk factors of diabetes, with 124 of the 470 (26.38%) responses given by the participants citing a stressful lifestyle as the major contributor. Among the most common organs affected by diabetes, the kidneys emerged as the most common response. Furthermore, the most popular management strategies adopted for diabetes were exercise by 103 (32.08%), diet by 101 (31.46%), and medications by 97 (30.21%) participants, with the urban and rural populations relying more on medicines and diet plus exercise, respectively. However, this was not statistically significant.  Conclusion: The study thus successfully narrates the current level of awareness about type 2 diabetes in Telangana. It highlights some valid differences in the data collected from the urban and rural participants as well. This adds to the existing knowledge database, which is already limited, and facilitates further policy development.