There is mounting evidence that type 2 diabetes mellitus (T2DM) is related with increased risk for the development of cancer. Apart from shared common risk factors typical for both diseases, diabetes driven factors including hyperinsulinemia, insulin resistance, hyperglycemia and low grade chronic inflammation are of great importance. Recently, vitamin D deficiency was reported to be associated with the pathogenesis of numerous diseases, including T2DM and cancer. However, little is known whether vitamin D deficiency may be responsible for elevated cancer risk development in T2DM patients. Therefore, the aim of the current review is to identify the molecular mechanisms by which vitamin D deficiency may contribute to cancer development in T2DM patients. Vitamin D via alleviation of insulin resistance, hyperglycemia, oxidative stress and inflammation reduces diabetes driven cancer risk factors. Moreover, vitamin D strengthens the DNA repair process, and regulates apoptosis and autophagy of cancer cells as well as signaling pathways involved in tumorigenesis i.e., tumor growth factor β (TGFβ), insulin-like growth factor (IGF) and Wnt-β-Cathenin. It should also be underlined that many types of cancer cells present alterations in vitamin D metabolism and action as a result of Vitamin D Receptor (VDR) and CYP27B1 expression dysregulation. Although, numerous studies revealed that adequate vitamin D concentration prevents or delays T2DM and cancer development, little is known how the vitamin affects cancer risk among T2DM patients. There is a pressing need for randomized clinical trials to clarify whether vitamin D deficiency may be a factor responsible for increased risk of cancer in T2DM patients, and whether the use of the vitamin by patients with diabetes and cancer may improve cancer prognosis and metabolic control of diabetes.