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In light of the recent 750 GeV diphoton anomaly observed at the LHC, we study the possibility of accommodating the deviation from the standard model prediction based on the recently proposed Gauged Two Higgs Doublet Model. The model embeds two Higgs doublets into a doublet of a non-abelian gauge group SU(2)H, while the standard model SU(2)L right-handed fermion singlets are paired up with new heavy fermions to form SU(2)H doublets, and SU(2)L left-handed fermion doublets are singlets under SU(2)H. An SU(2)H scalar doublet, which provides masses to the new heavy fermions as well as the SU(2)H gauge bosons, can be produced via gluon fusion and subsequently decays into two photons with the new fermions circulating the triangle loops to account for the deviation from the standard model prediction.