Over the past decades, type 2 diabetes mellitus has become a major health problem and is now affecting more than 7% of the adult population in developed countries. Diabetes mellitus commonly occurs together with breast cancer and two of the major risk factors for type 2 diabetes, older age and obesity, are also associated with breast cancer. At least four mechanisms may associate diabetes mellitus and breast cancer: activation of the insulin pathway, activation of the insulin-like growth factor pathway, altered regulation of endogenous sex hormones and altered regulation of adipocytokines. Comparative cohort studies and case-control studies suggest that type 2 diabetes mellitus is associated with 10-20% excess risk of breast cancer. Gestational diabetes mellitus, but not type 1 diabetes mellitus, might also be associated with excess risk of breast cancer. Diabetes mellitus and its complications can adversely affect screening utilization and cancer therapy, and clinical studies suggest an association between diabetes and adverse breast cancer characteristics and inferior outcome. Interestingly, several antidiabetic therapies, including the biguanides and the peroxisome proliferator-activated receptor Y-ligands may also have activity against breast cancer and are being tested in clinical trials.