Abstract Objectives Inflammation and oxidative stress are main culprits behind atherosclerosis in diabetes mellitus. This study explores the effect of add-on Pentoxifylline on inflammatory burden and oxidative stress in hypertensive diabetic patients. Research design and methods 60 hypertensive type 2 diabetic, aged ≥ 45 years were evaluated for anthropometry, clinical parameters, C-reactive protein, total leukocyte count, erythrocyte sedimentation rate, serum albumin, plasma malondialdehyde, blood reduced glutathione, platelet aggregation and clot retraction profile. With informed consent and randomization, Pentoxifylline (400 mg) was prescribed to 30 patients orally twice daily with meals as add-on therapy to the standard therapeutic regimen for one month. The particular parameters were repeated in 26 patients in control group and 25 patients in Pentoxifylline group who completed the follow up. The study was a randomized, open, add-on clinical trial with parallel controls. Results At one-month follow-up, in the Pentoxifylline group, there was 20.9% decrease ( p < 0.001) in C-reactive protein, 18% reduction ( p < 0.001) in erythrocyte sedimentation rate, 11.1% reduction ( p < 0.001) in total leukocyte count and 5.8% increase ( p = 0.003) in serum albumin. Pentoxifylline showed 20.2% reduction in plasma malondialdehyde and 4.6% increase in blood reduced glutathione level. In therapeutic dose range, Pentoxifylline exerted a significant anti-aggregatory effect and a dose dependent decrease in clot retraction in-vitro but there was no significant change in ex-vivo clot retraction. The control group showed no statistically significant change in parameters assessed. Conclusion This study reveals improvements in inflammatory markers, oxidative stress and platelet-aggregation by Pentoxifylline, thus preventing atherosclerosis in diabetes mellitus.