Smokeless tobacco (SLT) products are widely used across the globe in various forms, often containing diverse chemical additives and artificial sweeteners. In India, the extensive use of SLT has raised concerns due to its link with serious oral health problems. Among individuals with Type 2 Diabetes Mellitus (T2DM), the sugar content in these products may further increase the risk of developing dental caries. The study included patients aged 20–79 years with or without SLT use and T2DM. Using a consecutive sampling method, 48 participants were enrolled: 24 SLT users (cases) and 24 non-users (controls). Data were collected through a structured questionnaire and clinical oral examination. Statistical analysis was performed using SPSS version 20.0. Chi-square test assessed association, and logistic regression was used to identify significant predictors. Male participants had significantly higher odds of developing dental caries than females (OR = 6.6, p = 0.04). Lower socioeconomic status was also linked with a greater prevalence of caries (p = 0.03). Among diabetic individuals, those with additional systemic illnesses showed a strong association with dental caries (OR = 5.48, p = 0.01). SLT users irrespective of diabetic status, had 11.66 times higher odds of developing dental caries compared to non-users (p = 0.01). This case-control study highlights a significant association between SLT use and increased prevalence of dental caries, particularly among individuals with type 2 diabetes Mellitus and lower socioeconomic status, emphasizing the need for targeted preventive strategies.