Diabetes is a major public health problem worldwide. Depression is a serious mental condition that decreases mental and physical functioning and reduces the quality of life. Several lines of evidence suggest a bidirectional relationship between diabetes and depression: diabetes patients are twice as likely to experience depression than nondiabetic individuals. In contrast, depression increases the risk of diabetes and interferes with its daily self-management. Diabetes patients with depression have poor glycemic control, reduced quality of life, and an increased risk of diabetes complications, consequently having an increased mortality rate. Conflicting evidence exists on the potential role of factors that may account for or modulate the relationship between diabetes and depression. Therefore, this review aims to highlight the most notable body of literature that dissects the various facets of the bidirectional relationship between diabetes and depression. A focused discussion of the proposed mechanisms underlying this relationship is also provided. We systematically reviewed the relevant literature in the PubMed database, using the keywords "Diabetes AND Depression". After exclusion of duplicate and irrelevant material, literature eligible for inclusion in this review was based on meta-analysis studies, clinical trials with large sample sizes (n =1,000), randomized clinical trials, and comprehensive national and cross-country clinical studies. The evidence we present in this review supports the pressing need for long, outcome-oriented, randomized clinical trials to determine whether the identification and treatment of patients with these comorbid conditions will improve their medical outcomes and quality of life. © 2018 The Korean Academy of Family Medicine.