Diabetes is associated with an increased susceptibility to infection and sepsis. Conflicting data exist on whether the mortality of patients with sepsis is influenced by the presence of diabetes, fuelling the ongoing debate on the benefit of tight glucose regulation in patients with sepsis. The main reason for which diabetes predisposes to infection appears to be abnormalities of the host response, particularly in neutrophil chemotaxis, adhesion and intracellular killing, defects that have been attributed to the effect of hyperglycaemia. There is also evidence for defects in humoral immunity, and this may play a larger role than previously recognised. We review the literature on the immune response in diabetes and its potential contribution to the pathogenesis of sepsis. In addition, the effect of diabetes treatment on the immune response is discussed, with specific reference to insulin, metformin, sulphonylureas and thiazolidinediones.