The prevalence of diabetes mellitus (DM) is increasing rapidly in the 21st century as a result of obesity, an ageing population, lack of exercise, and increased migration of susceptible patients. This costly and chronic disease has been likened recently to the 'Black Death' of the 14th century. Type 2 DM is the more common form and the primary aim of management is to delay the micro- and macrovascular complications by achieving good glycaemic control. This involves changes in lifestyle, such as weight loss and exercise, and drug therapy. Increased knowledge of the pathophysiology of diabetes has contributed to the development of novel treatments: glucagon-like peptide-1 (GLP-1) mimetics, dipeptidyl peptidase-4 (DPP-4) inhibitors, thiazolidinediones (TZDs), and insulin analogues. GLP-1 agonists mimic the effect of this incretin, whereas DPP-4 inhibitors prevent the inactivation of the endogenously released hormone. Both agents offer an effective alternative to the currently available hypoglycaemic drugs but further evaluation is needed to confirm their safety and clinical role. The past decade has seen the rise and fall in the use of the TZDs (glitazones), such that the only glitazone recommended is pioglitazone as a third-line treatment. The association between the use of rosiglitazone and adverse cardiac outcomes is still disputed by some authorities. The advent of new insulin analogues, fast-acting, and basal release formulations, has enabled the adoption of a basal-bolus regimen for the management of blood glucose. This regimen aims to provide a continuous, low basal insulin release between meals with bolus fast-acting insulin to limit hyperglycaemia after meals. Insulin therapy is increasingly used in type 2 DM to enhance glycaemic control. Recently, it has been suggested that the use of the basal-release insulins, particularly insulin glargine may be associated with an increased risk of cancer. Although attention is focused increasingly on newer agents in the treatment of diabetes, metformin and the sulphonylureas are still used in many patients. Metformin, in particular, remains of great value and may have novel anti-cancer properties.