A growing body of evidence suggests a possible relationship between the consumption of dairy products and the incidence of diabetes. A positive correlation between the early introduction of dairy in infancy and the incidence of type 1 diabetes (T1D) in genetically predisposed infants has been suggested by studies on rodents and humans. However, the lines of evidence supporting this association, including epidemiological studies and the observation of antibodies to bovine serum albumin, β-casein and bovine insulin in the serum of patients with T1D, are not without controversy. On the other hand, an inverse relationship between the consumption of dairy foods and the development of metabolic syndrome and/or type 2 diabetes (T2D) has been implied by epidemiological studies. Several dairy components, especially milk proteins, are believed to play a role in the beneficial effect of dairy consumption on glucose regulation by modulation of incretin hormones. Other dietary factors have also been associated with the incidence of T1D and T2D, indicating that dairy foods might be only one among many dietary agents possibly implicated in the development of diabetes. The present paper critically reviews the evidence and plausible mechanisms for the putative associations between dairy food consumption and incidence of T1D and T2D.