Arachidonic acid (AA) is metabolized by cyclooxygenase (COX), lipoxygenase (LOX), and cytochrome P450 (CYP) enzymes into eicosanoids, which are involved in diverse diseases, including type 1 and type 2 diabetes. During the last thirty years, evidence has been accumulated that suggests important functions for eicosanoids in the control of pancreatic β-cell function and destruction. AA metabolites of the COX pathway, especially prostaglandin E2 (PGE2), appear to be significant factors to β-cell dysfunction and destruction, participating in the pathogenesis of diabetes and its complications. Several elegant studies have contributed to the sorting out of the importance of 12-LOX eicosanoids in cytokine-mediated inflammation in pancreatic β cells. The role of CYP eicosanoids in diabetes is yet to be explored. A recent publication has demonstrated that stabilizing the levels of epoxyeicosatrienoic acids (EETs), CYP eicosanoids, by inhibiting or deleting soluble epoxide hydrolase (sEH) improves β-cell function and reduces β-cell apoptosis in diabetes. In this review we summarize recent findings implicating these eicosanoid pathways in diabetes and its complications. We also discuss the development of animal models with targeted gene deletion and specific enzymatic inhibitors in each pathway to identify potential targets for the treatment of diabetes and its complications.