Modern living is associated with an epidemic of type 2 diabetes mellitus (T2DM). Sleep disturbances such as insomnia and frequent awakenings are strong independent risk factors for incident diabetes with a magnitude of effect comparable to a family history of diabetes. Melatonin has been implicated in regulation of circadian rhythm and sleep, but it is also ascribed anti-oxidative properties and effects on glucose homeostasis. In pancreatic islets melatonin have dual effects depending on which signaling pathway is activated by receptor binding, thus both inhibitory and stimulatory effects on insulin secretion have been reported. The effect of melatonin on the secretion of gut hormones such as glucagon-like peptide 1 (GLP-1) and influence of melatonin on beta cell sensitivity to gut hormones is largely unknown, but the presence of the melatonin receptor in the gut suggests that it may have a role. A potential association between melatonin and T2DM has only been addressed in few human physiological studies, but the topic has received renewed interest since genetic-epidemiological studies have pointed to a role for melatonin in the development of the disease. Genetic mutations in the melatonin receptor which is predicted to change the physiological effects of melatonin have been found to increase the risk for T2DM. Additionally, low endogenous melatonin production has been linked to T2DM risk.