diff --git a/aix360/data/diabetes_data/__init__.py b/aix360/data/diabetes_data/__init__.py
new file mode 100644
index 0000000..e69de29
diff --git a/aix360/datasets/diabetes_dataset.py b/aix360/datasets/diabetes_dataset.py
new file mode 100644
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+++ b/aix360/datasets/diabetes_dataset.py
@@ -0,0 +1,64 @@
+import os
+import math
+from io import StringIO
+import requests
+import pandas as pd
+from sklearn.model_selection import train_test_split
+
+
+class DiabetesDataset:
+    """This dataset consists of 10 baseline variables, age, sex, body mass index, average
+    blood pressure, and six blood serum measurements were obtained for each of n = 442
+    diabetes patients, as well as the response of interest, a quantitative measure of disease
+    progression one year after baseline.
+
+    References:
+        .. [#1] Bradley Efron, Trevor Hastie, Iain Johnstone and Robert Tibshirani, "Least Angle Regression,"
+        .. [#2] https://www4.stat.ncsu.edu/~boos/var.select/diabetes.html
+
+    """
+
+    def __init__(self):
+        self.data_folder = os.path.realpath(
+            os.path.join(
+                os.path.dirname(os.path.realpath(__file__)), "../data", "diabetes_data"
+            )
+        )
+        self.data_file = os.path.realpath(
+            os.path.join(self.data_folder, "diabetes.csv")
+        )
+        diabetes_url = "https://www4.stat.ncsu.edu/~boos/var.select/diabetes.tab.txt"
+
+        if not os.path.exists(self.data_file):
+            response = requests.get(diabetes_url)
+            data = pd.read_csv(StringIO(response.text), sep="\t")
+            data.to_csv(self.data_file, index=False)
+
+    def load_data(self, return_only_numerical=True, test_size=0.3, random_state=None):
+        """
+        Prepares train and test dataframes.
+
+        Returns:
+
+            x_train (np.ndarray): Train data in numpy format.
+            x_test (np.ndarray): Test data in numpy format.
+            y_train (np.ndarray): Train labels in numpy format.
+            x_test (np.ndarray): Test labels in numpy format.
+        """
+        df = pd.read_csv(self.data_file)
+        target_names = ["Y"]
+
+        feature_names = df.columns.tolist()
+        feature_names.remove(target_names[0])
+
+        if return_only_numerical:
+            feature_names.remove("SEX")  # categorical feature
+
+        X = df[feature_names].values
+        y = df[target_names].values.reshape(-1)
+
+        x_train, x_test, y_train, y_test = train_test_split(
+            X, y, test_size=test_size, random_state=random_state
+        )
+
+        return x_train, x_test, y_train, y_test, feature_names, target_names