Polycystic ovary syndrome (PCOS) often coexists with a wide spectrum of dysglycemic conditions, ranging from impaired glucose tolerance to type 2 diabetes mellitus (T2D), which occur to a greater extent compared to healthy body mass index-matched women. This concurrence of disorders is mainly attributed to common pathogenetic pathways linking the two entities, such as insulin resistance. However, due to methodological flaws in the available studies and the multifaceted nature of the syndrome, there has been substantial controversy as to the exact association between T2D and PCOS which has not yet been elucidated. The aim of this review is to present the best available evidence regarding the epidemiology of dysglycemia in PCOS, the unique pathophysiological mechanisms underlying the progression of dysglycemia, the most appropriate methods for assessing glycemic status and the risk factors for T2D development in this population, as well as T2D risk after transition to menopause. Proposals for application of a holistic approach to enable optimal management of T2D risk in PCOS are also provided. Specifically, adoption of a healthy lifestyle with adherence to improved dietary patterns, such the Mediterranean diet, avoidance of consumption of endocrine-disrupting foods and beverages, regular exercise, and the effect of certain medications, such as metformin and glucagon-like peptide 1 receptor agonists, are discussed. Furthermore, the maintenance of a healthy weight is highlighted as a key factor in achievement of a significant reduction of T2D risk in women with PCOS.