Type 2 diabetes mellitus (T2DM) is associated with increased risk of severe comorbidities and mortality; its prevalence is increasing worldwide, linked with the increasing prevalence of obesity. Weight loss prevents the development of T2DM in obese subjects, and can reverse T2DM in morbid obesity. This paper reviews bariatric surgery as a means for prevention and treatment of T2DM and its complications, in comparison with medical treatment, and analyzes the possible mechanisms involved. In morbidly obese patients bariatric surgery results in stable weight loss and long-term reduction in incidence and prevalence of obesity-related comorbidities, especially T2DM. The efficacy of bariatric surgery in improving and normalizing glucose levels has been confirmed by a large number of studies, comparing surgery with medical therapy. When compared to each other, malabsorptive and mixed malabsorptive/restrictive surgery techniques have shown better outcomes than restrictive techniques in terms of T2DM remission. However it is demonstrated that T2DM can reappear in the following years, especially in patients with advanced age, female sex, longer duration of T2DM, poorer glycemic control, use of insulin before surgery and weight regain. Bariatric surgery is superior to conventional medical therapy in inducing significant weight loss and control of T2DM. Weight loss has pleiotropic effects: T2DM can disappear and then re-appear as a result of persistent beta-cells impairment, while other effects last much longer, as reduction of blood pressure and improvement of lipids and of kidney function. This is probably the reason for long-term prevention of cardiovascular events and of mortality in obese and in obese-diabetic patients. The effect of bariatric surgery on diabetic retinopathy is still controversial.