For healthy existence, humans need to spend one-third of their time sleeping. Any qualitative or quantitative disturbances in sleep would result in an increased prevalence of obesity, metabolic disorders, diabetes, cardiovascular diseases, and hypertension. The paper aims to highlight the growing global problem of insufficient sleep and its significant impact on the rising incidence of diabetes mellitus. An extensive literature search was done in all major databases for “insufficient sleep” and “Diabetes Mellitus” for this review. Shorter (<6 h) and longer (>9 h) durations of sleep have been adversely related to insulin resistance. Though the relation between insufficient sleep and diabetes mellitus is more or less understood, little is known about how oversleeping or hypersomnia (10–12 h) increases the risk of diabetes. The relationship between sleep disturbances and diabetes is dual-sided, as chronic sleep disturbances would elevate the risk of developing insulin resistance, while diabetes would worsen the quality of sleep. Both the qualitative and quantitative disturbances in sleep significantly increase the risk of developing diabetes, which is supported by numerous community-based and hospital-based epidemiological studies discussed in this review. Obstructive sleep apnea is one of the most common sleep disorders and is characterized by chronic intermittent hypoxia and increased sympathetic activity, thus leading to a higher prevalence of diabetes. Sleep therapy may serve as a low-cost method for fighting against the rising epidemic of diabetes.