It has long been established that hyperglycemia with or without a prior diagnosis of diabetes increases both mortality and disease-specific morbidity in hospitalized patients1–4 and that goal-directed insulin therapy can improve outcomes.5–9 During the past decade, since the widespread institutional adoption of intensified insulin protocols after the publication of a landmark trial,5,10 the pendulum in the inpatient diabetes literature has swung away from achieving intensive glucose control and toward more moderate and individualized glycemic targets.11,12 This change in clinical practice is the result of several factors, including challenges faced by hospitals to coordinate glycemic control across all levels of care,13,14 publication of negative prospective trials,15,16 revised recommendations from professional organizations,17,18 and increasing evidence on the deleterious effect of hypoglycemia.19–22 This article reviews the pathophysiology of hyperglycemia during illness, the mechanisms for increased complications and mortality due to hyperglycemia and hypoglycemia, beneficial mechanistic effects of insulin therapy and provides updated recommendations for the inpatient management of diabetes in the critical care setting and in the general medicine and surgical settings.23,24