Background Metformin is the most common oral hypoglycemic used and associated with certain abnormalities. The objective was to evaluate and define the occurrence and bases of vitamin B12 deficiency amongst patients on Metformin for diabetes mellitus type II. Methods A cross-sectional study was conducted on 209 patients having diabetes type II between January-December 2016. The patients aged > 45 years and who had taken metformin for at least three months were recruited with regular follow-up at the Endocrinology Unit of Hayatabad Medical Complex and Diabetic Center Hayatabad, Peshawar. The patients were included in a survey after which they had their serum B12 levels measured. Serum B12 levels < 150 pg/ml is defined as the B12 deficiency. Results About 29.66% of diabetic patients had confirmed the B12 insufficiency through laboratory tests. The patients on metformin had statistically lower values of B12 (P = 0.01). For the patients who smoked, vitamin B12 deficiency was significantly higher than those who did not smoke (p= <0.001). Also in patients using multivitamins, vitamin B12 deficiency was lower compared to nonusers (p=0.05). Conclusion Our study shows that for the patients with type 2 diabetes (T2DM), long-term treatment with metformin and smoking are associated with higher chances of developing vitamin B12 deficiency. Clinicians should, therefore, recognize this significant element and should screen diabetics who are on metformin treatment for any B12 insufficiency, which may be hidden, especially patients coming with neurologic symptoms. Additionally, multi vitamins taken daily may have a protective role.