Background: Microscopic colitis (MC) is a recognized cause of chronic diarrhea and is often underestimated when a colonoscopy appears normal. This study aims to accurately diagnose chronic diarrhea through histopathological examination of colonoscopic mucosal biopsies and assess the prevalence of microscopic colitis and the diagnostic value of biomarkers. Methods: A hospital-based cohort study was conducted on 116 patients with chronic diarrhea. Colonoscopies and colonic mucosal biopsies were performed and analyzed, along with various tests including fecal calprotectin (FC) level, erythrocyte sedimentation rate (ESR), C-reactive protein (CRP), stool analysis, routine laboratory tests, and clinical data related to nocturnal diarrhea, abdominal pain, and unexplained weight loss. Results: In the study group, 32.8% had MC, with 25.9% having lymphocytic colitis (LC) and 6.9% having collagenous colitis (CC). Patients with MC had significantly higher FC, ESR, and CRP levels than those without colitis (p < 0.001). Factors associated with MC included nocturnal diarrhea (OR = 4.26; 95% CI [1.64–11.08]; p-value = 0.003) and abdominal pain (OR = 4.62; 95% CI [1.85–11.54]; p-value = 0.001). ESR at a cutoff >14 mm/h and FC at a cutoff >64 mcg/g showed excellent validity in diagnosing MC with area under the curve (AUC) values of 0.94 and 0.97, respectively. Conclusions: Microscopic colitis, particularly LC-type, is not an uncommon cause of chronic diarrhea, especially when accompanied by symptoms such as abdominal pain and nocturnal diarrhea, warranting further investigation, including inflammatory markers and colonic biopsy. Inflammatory markers can be useful in diagnosing MC with proper values and approaches; however, further studies are needed.