Forkhead box O (FoxO) proteins are transcription factors that mediate many aspects of physiology and thus have been targeted as therapeutics for several diseases including metabolic disorders such as type 2 diabetes mellitus (T2D). The role of FoxO1 in metabolism has been well studied, but recently FoxO1’s potential for diabetes prevention and therapy has been debated. For example, studies have shown that increased FoxO1 activity in certain tissue types contributes to T2D pathology, symptoms, and comorbidities, yet in other tissue types elevated FoxO1 has been reported to alleviate symptoms associated with diabetes. Furthermore, studies have reported opposite effects of active FoxO1 in the same tissue type. For example, in the liver, FoxO1 contributes to T2D by increasing hepatic glucose production. However, FoxO1 has been shown to either increase or decrease hepatic lipogenesis as well as adipogenesis in white adipose tissue. In skeletal muscle, FoxO1 reduces glucose uptake and oxidation, promotes lipid uptake and oxidation, and increases muscle atrophy. While many studies show that FoxO1 lowers pancreatic insulin production and secretion, others show the opposite, especially in response to oxidative stress and inflammation. Elevated FoxO1 in the hypothalamus increases the risk of developing T2D. However, increased FoxO1 may mitigate Alzheimer’s disease, a neurodegenerative disease strongly associated with T2D. Conversely, accumulating evidence implicates increased FoxO1 with Parkinson’s disease pathogenesis. Here we review FoxO1’s actions in T2D conditions in metabolic tissues that abundantly express FoxO1 and highlight some of the current studies targeting FoxO1 for T2D treatment.