This narrative review of the literature provides a summary and discussion of 25 years of research into the complex links between depression and diabetes. Systematic reviews have shown that depression occurs more frequently in people with type 1 or type 2 diabetes compared with people without diabetes. Currently, it remains unclear whether depression is also more common in people with impaired glucose metabolism or undiagnosed type 2 diabetes compared with people without diabetes. More prospective epidemiological research into the course of depression and an exploration of mechanisms in individuals with diabetes are needed. Depression in diabetes is associated with less optimal self-care behaviours, suboptimal glycaemic control, impaired quality of life, incident micro- and macrovascular diseases, and elevated mortality rates. Randomized controlled trails concluded that depression in diabetes can be treated with antidepressant medication, cognitive-behavioural therapy (individual, group-based or web-based), mindfulness-based cognitive therapy and stepped care. Although big strides forward have been made in the past 25 years, scientific evidence about depression in diabetes remains incomplete. Future studies should investigate mechanisms that link both conditions and test new diabetes-specific web- or app-based interventions for depression in diabetes. It is important to determine whether treatment or prevention of depression prevents future diabetes complications and lowers mortality rates.