Aims/hypothesis We examined the associations between depressive symptoms and diabetes distress with glycaemic control and diabetes complications over 2 years, after diagnosis of type 2 diabetes. Methods In a multi-ethnic, primary care cohort (n = 1735) of adults, all with recent (<6 months) diagnosis of type 2 diabetes, we measured the associations between depressive symptoms (Patient Health Questionnaire-9 [PHQ-9] score ≥10) and diabetes distress (Problem Areas in Diabetes [PAID] score ≥40), with change in 2 year HbA 1c as the primary outcome and with incident rates of diabetes complications as secondary outcomes. Multivariate models were used to account for potential confounders. Results Of the 1651 participants (95.2%) of the total primary care cohort with available baseline PHQ-9 and PAID scores, mean ± SD age was 56.2 ± 11.1 years, 55.1% were men and 49.1% were of non-white ethnicity; 232 (14.1%) and 111 (6.7%) had depressive symptoms and diabetes distress, respectively. After adjustment for confounders, depressive symptoms were not associated with worsening HbA 1c . After adjustment for age, sex, ethnicity, vascular risk factors and diabetes treatments, depressive symptoms were associated with increased risk of incident macrovascular complications (OR 2.78 [95% CI 1.19,6.49], p = 0.018) but not microvascular complications. This was attenuated (p = 0.09) after adjustment for IL-1 receptor antagonist concentration. Diabetes distress was not associated with worsening HbA 1c or incident complications. Conclusions/interpretation In the first 2 years of type 2 diabetes, the effect of depressive symptoms and diabetes distress on glycaemic control is minimal. There was, however, an association between depressive symptoms and incidence of macrovascular complications. Elevated innate inflammation may be common to both depression and macrovascular diabetes complications, but these findings require replication.