Diabetes mellitus and depression are public health concerns of the present and, as predicted, also the future. The observation that depression is seen more frequently in diabetic patients compared to the non-diabetic population has been proven by several recent studies. The co-occurrence carries further risks for the affected patients, as depression in diabetics may affect sufficient treatment of diabetes and enhance the development of diabetic complications. These may further worsen depressive symptoms causing a vicious cycle in these patients. In the present paper authors discuss in detail the theoretic and practical issues of the complex two directional relationships between diabetes and depression. Their goal is to draw attention to depression as co-morbidity of diabetes that may interfere with the optimization of diabetic patient's carbohydrate metabolism. If sufficient glycaemic control is not achieved using routine clinical methods depression should be evaluated as a probable cause. If needed, depression should be treated to improve the medical outcomes and quality of life of diabetic patients.