Type 2 diabetes mellitus (T2DM) and atrial fibrillation (AF) are widespread chronic conditions that profoundly impact public health. While the intricate mechanisms linking these two diseases remain incompletely understood, this review sets out to comprehensively analyze the current evidence about their pathophysiology, epidemiology, diagnosis, prognosis, and treatment. We reveal that T2DM can influence the electrical and structural properties of the atria through multiple pathways, including oxidative stress, inflammation, fibrosis, connexin remodeling, glycemic variability, and autonomic dysfunction. Moreover, it significantly influences AF's clinical course, elevating the risk of heart failure, stroke, and cardiovascular mortality. Our review also explores treatment options for individuals with T2DM and AF, encompassing antidiabetic and antiarrhythmic drugs and non-pharmacological interventions, such as cardioversion catheter ablation and direct current cardioversion. This review depicts an insight into the clinical interplay between T2DM and AF. It deepens our comprehension of the fundamental mechanisms, potential therapeutic interventions, and their implications for patient care. This comprehensive resource benefits researchers seeking to deepen their knowledge in this domain. Ultimately, our findings pave the way for more effective strategies in managing AF within the context of T2DM.