Increased risk of cerebrovascular diseases in type 2 diabetes mellitus is associated with impaired cerebrovascular reactivity (CVR) as well as the degree of insulin resistance. Recent studies in healthy human subjects have shown that CVR measured in response to hypercapneic stimulus is associated with significant rise in arterial blood pressure (ABP) and hence must be corrected for associated changes in ABP (Claasen et al, 2007). The aim of the study was to investigate the relationship between CVR and insulin resistance in the patients of type 2 diabetes mellitus after correcting for the associated ABP changes during CVR assessment. The middle cerebral artery blood flow velocity (MCAV) was measured by transcranial ultrasound technique. The non-invasive beat-to-beat blood pressure was measured from finger using technique of Penaz. The CVR was assessed by measuring the changes in MCAV and cerebrovascular conductance (CVC, calculated as MCAV / mean ABP) after breathing of 6% CO2 for 2 minutes in 34 uncomplicated type 2 diabetic patients and after breath holding for 30 second. Insulin resistance was assessed by Homeostatic model assessment of insulin resistance (HOMA-IR). The HOMA-IR of the subjects was 3.88 ± 1.84 (mean ± S.D). On breathing 6% CO2, the mean ABP increased from baseline 87.68 ± 10.52 to 101.0 ± 14.32 mmHg (p<0.0001), the MCAV increased from baseline 45.76±10.02 to 66.94±18.11 cm/sec (p<0.0001) and CVC increased from baseline 0.527 ± 0.125 to 0.669 ± 0.182 cm/s/mmHg (p<0.0001). On breath holding, the ABP, MCAV and CVC increased significantly as compared to baseline (101.2 ± 19.06, p<0.0001; 61.13 ± 16.59, p<0.0001 and 0.621 ± 0.186 , p<0.0001 respectively). During 6% CO2, both MCAV and CVC were significantly correlated with HOMA-IR (r = -0.340, p = 0.0491 and r = -0.3749, p = 0.0289, respectively). However, during breath holding MCAV did not significantly correlate with HOMA-IR (r = -0.3406, p = 0.0799) while the CVC was significantly correlated (r = -0.3746, p= 0.0291). In conclusion, hypercapneic stimulus given to assess the cerebrovascular reactivity causes substantial increase in the blood pressure. The increase in blood pressure can affect the MCAV during the tests and therefore it is better to measure CVC rather than MCAV to correct for blood pressure rise during these tests. The degree of impairment of CVR is associated with severity of Insulin resistance in uncomplicated type 2 diabetes mellitus.