INTRODUCTION: Type 2 diabetes (T2D) has been linked to micro and macro-vascular complications due to long-term hyperglycemia, which may affect pulmonary function and muscle oxygenation. The aim of this study was to evaluate all stages of the oxygen pathway in obese individuals with uncomplicated T2D and matched obese individuals without T2D. METHODS: The study included obese adults with T2D free from clinically detectable microangiopathy (glycated hemoglobin ‘HbA1c’:8.3±1.2%), and 15 obese adults without T2D, matched for gender, age, and physical activity level. Lung function was assessed at rest and 15 minutes after exercise using spirometry. Participants performed a maximal incremental exercise test during which muscle oxygenation was monitored by near infrared spectroscopy “NIRS”. Arterial blood gas samples were collected from the radial artery at rest and during maximal exercise. RESULTS: Dynamic lung volumes (forced vital capacity: 102.2 ± 11.74 vs. 106.8 ± 16.15 %; forced expiratory volume in 1 second: 100.6 ±10.5 vs. 105.13 ± 16.5 %) were normal in both T2D and controls groups at baseline. There were no significant difference in spirometric lung function between pre- and post-exercise. During maximal exercise, the accumulation and increment in [THb] were significantly lower in the T2D group compared to the control group. [HHb] accumulation from rest to maximal exercise was significantly lower in type 2 diabetes relative to control. Despite similar physical activity level and heart rates at exhaustion (158.2±21.6 vs. 166.2±10.5 bpm, respectively), individuals with T2D had lower VO2max than controls. There were no significant differences in arterial blood gas analyses (PaO2 and PaCO2) between groups. CONCLUSION: Pulmonary function is normal in individuals with uncomplicated T2D at rest. The defect in maximal oxygen consumption may be due to impaired skeletal muscle oxygenation during exercise, related to reduced limb blood flow and altered muscle deoxygenation in uncomplicated type 2 diabetes.