Type 2 diabetes mellitus (T2DM) is considered a global epidemic, and is constantly on the rise. In Israel, the percentage of diabetics in the Arab population is twice that found in the Jewish population (12% and 6.2%, respectively). Findings suggest that low differentiation of self (DoS: emotional reactivity+ fusion with others, I-position, emotional cutoff) may raise vulnerability to certain physiological pathologies by increasing susceptibility to psychological distress. The major goal of this study was to test differences in DoS and emotional distress (anxiety and depressive symptoms) between diabetic and healthy participants. The second aim was to examine cultural differences within these metrics. Another purpose was to examine the relationship between DoS and emotional distress among healthy and diabetic participants. The sample included 261 participants, of whom 154 were healthy and 107 were diabetic. Diabetics reported more severe depressive symptoms, higher levels of anxiety and emotional cutoff and lower levels of I-position than healthy individuals. The groups did not differ in their levels of emotional reactivity + fusion with others. Arabs demonstrated higher levels of emotional cutoff, anxiety and depressive symptoms and lower levels of I-position than Jews. However, Arabs and Jews did not differ in their levels of emotional reactivity + fusion with others. Emotional reactivity + fusion with others contributed the most to diabetes among Arabs, while depressive symptoms contributed the most among Jews. Finally, among Jewish participants, age was positively correlated with emotional cutoff and depressive symptoms. Emotional cutoff was positively correlated with anxiety and depressive symptoms. Emotional reactivity + fusion with others was positively correlated with anxiety. Among Arab participants, age was positively correlated with emotional cutoff, anxiety and depressive symptoms. I-position was negatively correlated with all study variables. Emotional cutoff was positively correlated, anxiety and depressive symptoms. Emotional reactivity + fusion with others was positively correlated with anxiety and depressive symptoms.