Type 2 diabetes is a major public health concern with high morbidity, mortality, and health-care costs. Recent reports have indicated that the majority of patients with type 2 diabetes also have obstructive sleep apnea (OSA). There is compelling evidence that OSA is a significant risk factor for cardiovascular disease and mortality. Rapidly accumulating data from both epidemiologic and clinical studies suggest that OSA is also independently associated with alterations in glucose metabolism and places patients at an increased risk of the development of type 2 diabetes. Experimental studies in humans and animals have demonstrated that intermittent hypoxia and reduced sleep duration due to sleep fragmentation, as occur in OSA, exert adverse effects on glucose metabolism. Based on the current evidence, clinicians need to address the risk of OSA in patients with type 2 diabetes and, conversely, evaluate the presence of type 2 diabetes in patients with OSA. Clearly, there is a need for further research, using well-designed studies and long-term follow-up, to fully demonstrate a causal role for OSA in the development and severity of type 2 diabetes. In particular, future studies must carefully consider the confounding effects of central obesity in examining the link between OSA and alterations in glucose metabolism. The interactions among the rising epidemics of obesity, OSA, and type 2 diabetes are likely to be complex and involve multiple pathways. A better understanding of the relationship between OSA and type 2 diabetes may have important public health implications.