The incidence of diabetes mellitus and hepatocellular carcinoma (HCC) has been increasing worldwide during the last few decades, in the context of an increasing prevalence of obesity and non-alcoholic fatty liver disease (NAFLD). Epidemiologic studies have revealed that patients with diabetes have a 2- to 3-fold increased risk of developing HCC, independent of the severity and cause of the underlying liver disease. A bidirectional relationship exists between diabetes and liver disease: advanced liver disease promotes the onset of diabetes, and HCC is an important cause of death in patients with diabetes; conversely, diabetes is a risk factor for liver fibrosis progression and HCC development, and may worsen the long-term prognosis of patients with HCC. The existence of close interconnections among diabetes, obesity, and NAFLD causes insulin resistance-related hyperinsulinemia, increased oxidative stress, and chronic inflammation, which are assumed to be the underlying causes of hepatocarcinogenesis in patients with diabetes. No appropriate surveillance methods for HCC development in patients with diabetes have been established, and liver diseases, including HCC, are often overlooked as complications of diabetes. Although some antidiabetic drugs are expected to prevent HCC development, further research on the optimal use of antidiabetic drugs aimed at hepatoprotection is warranted. Given the increasing medical and socioeconomic impact of diabetes on HCC development, diabetologists and hepatologists need to work together to develop strategies to address this emerging health issue. This article reviews the current knowledge on the impact of diabetes on the development and progression of HCC.