As older adults make up an increasingly lager proportion of the diabetic population, the spectrum of chronic diabetes complications will change and expand. Aside from the traditional long-term complications, diabetes has been associated with excess risk of a number of clinical conditions typical of the geriatric population, including functional decline, physical disability, falls, fractures, cognitive impairment, and depression. These conditions are common and profoundly affect the quality of life of older patients with diabetes. The identification of effective ways of preventing and treating these emerging complications, thus improving quality of life among older diabetic patients, is already a major issue in geriatric medicine. In this narrative review, we describe current epidemiological and clinical evidence supporting the association between diabetes and physical disability in older persons. Furthermore, the potential biological mechanisms underlying such an association are analyzed.