Background: The purpose of this article is to clarify and define medical qigong and to identify an appropriate study design and methodology for a large-scale study looking at the effects of qigong in patients with type 2 diabetes mellitus (T2DM), specifically subject enrollment criteria, selection of the control group and study duration. Methods: A comprehensive literature review of English databases was used to locate articles from 1980–May 2017 involving qigong and T2DM. Control groups, subject criteria and the results of major diabetic markers were reviewed and compared within each study. Definitions of qigong and its differentiation from physical exercise were also considered. Results: After a thorough review, it was found that qigong shows positive effects on T2DM; however, there were inconsistencies in control groups, research subjects and diabetic markers analyzed. It was also discovered that there is a large variation in styles and definitions of qigong. Conclusions: Qigong exercise has shown promising results in clinical experience and in randomized, controlled pilot studies for affecting aspects of T2DM including blood glucose, triglycerides, total cholesterol, weight, BMI and insulin resistance. Due to the inconsistencies in study design and methods and the lack of large-scale studies, further well-designed randomized control trials (RCT) are needed to evaluate the ‘vital energy’ or qi aspect of internal medical qigong in people who have been diagnosed with T2DM.