Type 2 diabetes patients exhibit subclinical inflammation but the regulatory mechanisms are poorly understood. We sought to evaluate the role of miR-146a expression along with its downstream proinflammatory signals in relation to glycemic control and insulin resistance. Study subjects (n = 20 each) comprised of clinically well characterized Type 2 diabetes patients and control non-diabetic subjects. miRNA and mRNA expression levels were probed in peripheral blood mononuclear cells (PBMC) by Real-time RT-PCR and plasma levels of TNFα and IL-6 were measured by ELISA. The miR-146a expression levels were significantly decreased in PBMCs from patients with Type 2 diabetes compared to control subjects. Among the target genes of miR-146a, TRAF-6 mRNA expression was significantly increased in patients with Type 2 diabetes while there was no significant difference in the mRNA levels of IRAK1 in the study groups. In contrast, there were significantly increased levels of NFκB expression in patients with Type 2 diabetes. There was an increased trend in the levels of TNFα and IL-6 mRNA in patients with type 2 diabetes. While SOCS-3 mRNA levels increased, plasma TNFα and IL-6 levels were also significantly higher in patients with type 2 diabetes. miR-146a expression was negatively correlated to glycated hemoglobin, insulin resistance, TRAF6, and NFκB mRNA levels and circulatory levels of TNFα and IL-6. Reduced miR-146a levels are associated with insulin resistance, poor glycemic control, and several proinflammatory cytokine genes and circulatory levels of TNFα and IL-6 in Asian Indian Type 2 diabetic patients.