New-onset diabetes mellitus (NODM) develops in approximately 15% of liver transplant recipients, and a similar proportion of patients have diabetes prior to transplantation. Preexisting diabetes and probably NODM are associated with increased mortality and risk of infection. NODM occurs more frequently among patients with hepatitis C infection; additional risk factors include family history, male gender, increasing weight, and alcoholic cirrhosis. Corticosteroid therapy, particularly bolus injections, increases likelihood of NODM, and randomized clinical trials and retrospective studies have shown NODM to occur more frequently with tacrolimus compared with cyclosporine. Patients undergoing liver transplantation should be screened for diabetes risk factors, and fasting plasma glucose should be monitored regularly in all transplant recipients. Management of NODM is essentially similar to that of diabetes in the nontransplant population, and includes dietary and lifestyle modifications. In choosing oral agents and/or insulin, the individual medical profile of the patient must be considered carefully. Corticosteroid exposure should be limited as much as possible, and reduction of calcineurin inhibitor dose is prudent. Switching from tacrolimus to cyclosporine may be required in some cases to achieve improvement or resolution. In conclusion, prospective trials are necessary to properly define antidiabetic therapy and immunosuppressive strategies in this population.