Clinically significant depression is present in one of every four people with type 2 diabetes mellitus (T2DM). Depression increases the risk of the development of T2DM and the subsequent risks of hyperglycemia, insulin resistance, and micro- and macrovascular complications. Conversely, a diagnosis of T2DM increases the risk of incident depression and can contribute to a more severe course of depression. This linkage reflects a shared etiology consisting of complex bidirectional interactions among multiple variables, a process that may include autonomic and neurohormonal dysregulation, weight gain, inflammation, and hippocampal structural alterations. Two recent meta-analyses of randomized controlled depression treatment trials in patients with T2DM concluded that psychotherapy and antidepressant medication (ADM) were each moderately effective for depression and that cognitive behavior therapy (CBT) had beneficial effects on glycemic control. However, the number of studies (and patients exposed to randomized treatment) included in these analyses is extremely small and limits the certainty of conclusions that can be drawn from the data. Ultimately, there is no escaping the paucity of the evidence base and the need for additional controlled trials that specifically address depression management in T2DM. Future trials should determine both the effects of treatment and the change in depression during treatment on measures of mood, glycemic control, and medical outcome.