Long-term hyperglycemia in individuals with type 2 diabetes can detrimentally impact pulmonary function and muscle oxygenation. As a result, these factors can impede the body’s adaptation to physical exertion. We aimed to evaluate the oxygen pathway during maximal exercise among overweight/obese individuals with uncomplicated type 2 diabetes, in comparison with a group of matched overweight/obese individuals without diabetes, specifically concentrating on the effects on pulmonary function and muscle oxygenation. Fifteen overweight/obese adults with type 2 diabetes (HbA1c=8.3±1.2%) and 15 matched overweight/obese adults without diabetes underwent pre- and post-exercise lung function assessment. A maximal incremental exercise test was conducted, monitoring muscle oxygenation using near-infrared spectroscopy and collecting arterial blood gas samples. Both groups exhibited normal lung volumes at rest and after exercise. Spirometric lung function did not significantly differ pre- and post-exercise in either group. During maximal exercise, the type 2 diabetes group showed significantly lower augmentation in total hemoglobin and deoxygenated hemoglobin compared to the control group. Despite comparable usual physical activity levels and comparable heart rates at exhaustion, the type 2 diabetes group had a lower peak oxygen consumption than controls. No significant differences were found in arterial blood gas analyses (PaO2, SaO2, CaO2, and PaCO2) between the groups. Individuals with uncomplicated type 2 diabetes displayed normal pulmonary function at rest and post-exercise. However, impaired skeletal muscle oxygenation during exercise, resulting from reduced limb blood volume and altered muscle deoxygenation, may contribute to the lower VO2peak observed in this population.