Circular RNAs (circRNAs), a novel type of single-stranded noncoding RNAs with a covalently closed loop structure, are generated in a circular conformation via non-canonical splicing or back-splicing events. Functionally, circRNAs have been elucidated to soak up microRNAs (miRNAs) and RNA binding proteins (RBPs), serve as protein scaffolds, maintain mRNA stability, and regulate gene transcription and translation. Notably, circRNAs are strongly implicated in the regulation of β-cell functions, insulin resistance, adipocyte functions, inflammation as well as oxidative stress via acting as miRNA sponges and RBP sponges. Basic and clinical studies have demonstrated that aberrant alterations of circRNAs expressions are strongly associated with the initiation and progression of diabetes mellitus (DM) and its complications. Here in this review, we present a summary of the biogenesis, transportation, degradation and functions of circRNAs, and highlight the recent findings on circRNAs and their action mechanisms in DM and its complications. Overall, this review should contribute greatly to our understanding of circRNAs in DM pathogenesis, offering insights into the further perspectives of circRNAs for DM diagnosis and therapy.