Objectives: With aging populations around the world, frailty is becoming more prevalent increasing the need to early identify those at risk of frailty. The association between thyroid hormone levels and frailty in subjects with type 2 diabetes mellitus (T2DM) remains unclear. The objective of the study was to evaluate the relationship between thyroid hormone concentrations and frailty in older adults with T2DM. Methods: A total of 240 older adults with T2DM were divided into three groups according to the frailty phenotype criteria: robust group (n = 94), pre-frail (n = 110) and frail group (n = 36). Concentrations of free triiodothyronine (FT3), free thyroxine (FT4) and thyroid-stimulating hormone (TSH), 25-hydroxyvitamin D3 [25(OH) D3], highly sensitive C-reactive protein (hs-CRP) and interleukin-6 (IL-6) were determined. Handgrip strength was measured using a Jamar hand dynamometer. Physical function was assessed by gait speed and the timed go and up (TUG) test. Logistic regression analysis was performed to evaluate the association between FT3 and frailty. Results: The FT3 level was the lowest among frail people (2.56 ± 0.42 pg/mL), followed by pre-frail participants (2.73 ± 0.38 pg/mL), with the highest among the robust subjects (2.83 ± 0.43 pg/mL). FT3 level was positively correlated with handgrip strength and gait speed (R = 0.313, P < 0.001; R = 0.250, P < 0.001, respectively), while negatively correlated with TUG time (R = −0.276, P < 0.001). After adjusting for age, sex, TSH, 25(OH) D3 and estimate glomerular filtration rate (eGFR), logistic regression showed that low FT3 was significantly associated with an increased risk of frailty (odds ratio (OR): 4.53; 95% confidence interval (CI): 1.89–10.83; P = 0.001). Conclusion: Low levels of FT3 were associated with an increased risk of frailty in older adults with T2DM. Measuring FT3 might be useful for identifying those at high risk of frailty. © 2020 Elsevier Inc.