Purpose To investigate the relationship between type 2 diabetes and changes of the lid margin, meibomian glands and tear film in dry eye patients, to explore the possible pathological mechanism of the effect of type 2 diabetes on the ocular surface of dry eye disease. Research design and methods This cross-sectional study included 302 eyes of 151 patients. Participants were divided into two groups: dry eye disease with type 2 diabetes group (DED-DM group, n = 108) and dry eye disease without diabetes group (DED group, n = 194). All patients underwent morphological and physiological functional evaluation of the ocular surface and a blood glucose level test. Results Compared with the DED group, the DED-DM group had higher upper lid margin irregularity(P = 0.035), lid margin vascularity(P < 0.0001), plugging of gland orifices grade(P < 0.0001), lid margin thickening grade(upper, P < 0.001; lower, P = 0.002), upper meibomian gland dropout(P = 0.003) and ciliary hyperemia(P = 0.013), and shorter first non-invasive tear breakup time(NIBUT) (P = 0.011). Blood glucose level had a significant correlation with NIBUT(first, P = 0.006; average, P = 0.003), lid margin thickening grade(upper, P = 0.006; lower, P = 0.001), and lower lid margin irregularity (P = 0.016). Conclusions In patients with type 2 diabetes and dry eye, lid margin abnormalities, orifice plugging and tear film instability was more severe than patients with dry eye only.