Background: Diabetic nephropathy is a common and serious complication of diabetes mellitus, characterized by renal dysfunction and a range of pulmonary complications. Pulmonary function tests (PFTs) play a crucial role in assessing the respiratory health of diabetic nephropathy patients. This study aimed to investigate the impact of diabetic nephropathy on PFT parameters and their clinical significance. Materials and Methods: We conducted a cross-sectional study involving 120 diabetic nephropathy patients and 60 age-matched healthy controls. PFTs, including forced vital capacity (FVC), forced expiratory volume in one second (FEV1), FEV1/FVC ratio, peak expiratory flow rate (PEFR), and total lung capacity (TLC), were measured using standardized techniques. Glycemic control, duration of diabetes, and renal function parameters were also assessed. Results: In diabetic nephropathy patients, pulmonary function tests revealed impaired respiratory parameters, with a mean forced vital capacity (FVC) of 2.95 ± 0.45 L, a mean forced expiratory volume in one second (FEV1) of 2.45 ± 0.38 L, a mean FEV1/FVC ratio of 82.3% ± 4.2%, a mean peak expiratory flow rate (PEFR) of 450 ± 60 L/min, and a mean total lung capacity (TLC) of 5.9 ± 0.7 L. When compared to healthy controls, diabetic nephropathy patients exhibited significantly lower FVC (p < 0.001), FEV1 (p < 0.01), and PEFR (p < 0.05). Importantly, the FEV1/FVC ratio and TLC remained within normal limits and did not significantly differ from controls. Furthermore, these pulmonary impairments were found to be negatively correlated with the duration of diabetes (p < 0.05) and HbA1c levels (p < 0.01), suggesting a potential association with glycemic control. Conversely, no significant correlations were observed between pulmonary function test parameters and renal function parameters, such as serum creatinine and estimated glomerular filtration rate (eGFR), indicating that the observed respiratory changes may not be directly linked to the severity of renal dysfunction. Conclusion: Diabetic nephropathy patients showed impaired pulmonary function, as evidenced by reduced FVC, FEV1, and PEFR. The duration of diabetes and glycemic control were associated with these impairments. Regular monitoring of pulmonary function in diabetic nephropathy patients is essential for early detection and management of respiratory complications.