Diabetes mellitus is a serious and growing health problem worldwide and is associated with severe acute and chronic complications. Accruing epidemiological and clinical evidence have suggested that an increased cancer incidence is associated with diabetes as well as certain diabetes risk factors and diabetes medications. Several pathophysiological mechanisms for this relationship have been postulated, including insulin resistance and hyperinsulinemia, enhanced inflammation, aberrant metabolic state, endoplasmic reticulum stress, and deregulation of autophagy. In addition to these potential mechanisms, a number of common risk factors, including obesity, may be behind the association between diabetes and cancer. Furthermore, different anti-diabetic medications may modify cancer risk and mortality in patients with diabetes. This Review discusses evidence to support the relationship between diabetes and cancer development as well as the underlying mechanisms. We also discuss the relationship of current diabetes treatments and cancer risk or prognosis. Understanding the mechanisms that connect type 2 diabetes or diabetes treatments to cancer are crucial for establishing the fundamental strategies concerning about primary prevention, early detection and effective therapy against these diseases.