Introduction: Depression has been linked to abnormal glucose metabolism in diabetics by increasing insulin resistance. Cognitive behavioural therapy is commonly used psychotherapeutic approaches for reducing depression. It is usually time-limited, focuses on current problems and follows a structured style of intervention. Objective: To test the effectiveness of cognitive-behavioural therapy alone and along with aerobic exercises in reducing depression and to find its effect on blood sugar levels. To study the additional effect of aerobic exercises on cognitive behavioural therapy in depressed diabetics. Methods: Sixty diabetic patients were selected having a score of __ampersandsigngt;11 on Becks Depression Inventory (Age 35-60 years). HbA1c equal to or more than 8%, diabetic for more than two years. Patients were grouped (N=30/group) to receive cognitive behavioural therapy or cognitive behavioural therapy + aerobic exercises. The level of depression was evaluated using Becks Depression Inventory, postprandial blood sugar levels and glycated haemoglobin( HbA1c) levels were measured pre and post 6 weeks. The mood of patients was assessed using mood rating scale pre and post-intervention. Cognitive behavioural therapy was given for 6 weeks and results were analyzed. Results: A significant reduction was seen in depression, postprandial blood sugar levels and HbA1c levels in both the groups. There was also an improvement in the mood of the patients from depression to joyful over 6 weeks. Conclusion: Both aerobic exercises and cognitive behavioural therapy proved to be effective in reducing depression and thereby optimizing blood sugar levels and HbA1c levels.