Twenty Type 2 diabetic subjects between the age group of 30-60 years were studied to see the effect of 40 days of Yoga asanas on the nerve conduction velocity. The duration of diabetes ranged from 0-10 years. Subject suffering from cardiac, renal and proliferative retinal complications were excluded from the study Yoga asanas included Suryanamskar. Tadasan, Konasan, Padmasan Pranayam, Paschimottansan Ardhmatsyendrasan, Shavasan, Pavanmukthasan, Sarpasan and Shavasan. Subjects were called to the cardio-respiratory laboratory in the morning time and were given training by the Yoga expert. The Yoga exercises were performed for 30-40 minutes every day for 40 days in the above sequence. The subjects were prescribed certain medicines and diet. The basal blood glucose, nerve conduction velocity of the median nerve was measured and repeated after 40 days of Yogic regime. Another group of 20 Type 2 diabetes subjects of comparable age and severity, called the control group, were kept on prescribed medication and light physical exercises like walking. Their basal & post 40 days parameters were recorded for comparison. Right hand and left hand median nerve conduction velocity increased from 52.81 +/- 1.1 m/sec to 53.87 +/- 1.1 m/sec and 52.46 +/- 1.0 to 54.75 +/- 1/1 m/sec respectively. Control group nerve function parameters deteriorated over the period of study, indicating that diabetes is a slowly progressive disease involving the nerves. Yoga asanas have a beneficial effect on glycaemic control and improve nerve function in mild to moderate Type 2 diabetes with sub-clinical neuropathy.