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Background: People with type 2 diabetes mellitus (T2DM) are at greater risk of potentially inappropriate prescribing (PIP) due to multiple comorbidities and polypharmacy. IMPACT2DM (Inappropriate Medication Prescribing Assessment Criteria for Type 2 Diabetes Mellitus) is a tool designed to identify PIP for adults with T2DM. Objectives: To assess PIP for adults with T2DM in Ethiopia using the IMPACT2DM and to test the face validity and clinical validity of the tool. Methods: A cross-sectional study was undertaken using data extracted retrospectively from the medical records of adults being managed for T2DM at Debretabore Hospital. PIP was assessed using IMPACT2DM. Some items/item components of IMPACT2DM were modified to increase the tool's applicability for the outpatient setting, to clarify content or to use the terms most common in this particular setting. Multivariant logistic regression analyses were conducted to identify factors associated with PIP. Results: More than 90% of medical records had at least 1 PIP. Prescribing omission (80.9%) was the most commonly identified type of PIP. Adults with prescribing omissions are more likely to be ≥40 years old or to be prescribed with <5 medications. Adults with dosing problems were more likely ≥50 years old, or have had a fasting blood sugar (FBS) level out of the target range (80-130 mg/dL). Conclusions: IMPACT2DM is a clinically valid PIP identification tool for application in an Ethiopian outpatient setting. Health professionals should be alert to check for potential prescribing omissions for adults ≥40 years old and dosing problems for adults with an FBS level out of the target range or >50 years. [ABSTRACT FROM AUTHOR]