Candida is a yeast like fungus. It causes candidiasis which is a spectrum of disease from cutaneous, mucosal, systemic & multisystem dissemination. It is a coloniser of mucocutaneous surfaces of body but it is an opportunistic fungus causing severe type of infection. Objective of the study was to detect colonization of Candida species in diabetic patient & to detect virulence factors i.e., phospholipase, proteinase, esterase activity & homolysis activity in isolated strains of Candida from colonised diabetic patients. Throat swab and urine sample were collected from diabetic patients visiting the General Medicine OPD/Ward diagnosed with diabetes mellitus before six months and was submitted in microbiology department. Candida species were identified tested for production of virulence factors. Total 30 diabetes mellitus patients diagnosed 6 months before. In 41-65 years age groups, Candida colonization was found predominantly, 63% patients. Amongst these 78% had fasting sugar levels greater than the normal limits. The study revealed a strong correlation between higher fasting blood sugar levels and Candida colonization. The predominant isolate was Candida albicans in throat followed by Candida glabrata. Out of 27 Candida species isolates, 16 strains showed production of virulence factors. Amongst these 44 % (7/16) strains were positive for proteinase production, 38 % (6/16) were positive for esterase production, 13% (2/16) strains were positive for hemolysin and single strain (6%, 10/16) showed the production of phospholipase. The study concludes that Candida albicans was the predominant colonising species found followed by Candida glabrata in diabetic patients. Non-Candida albicans species can be seen as an emerging colonizing species in the diabetic patients and thereby are increasingly gaining clinical importance. Colonized or commensal Candida species showed in vitro production of virulence factor.