Diabetes mellitus, a global health challenge, influences millions worldwide by leading to severe complications and premature death. A key factor in its pathogenesis is immune cell dysfunction, which aggravates both type 1 and type 2 diabetes. The important role that immune cell dysregulation plays in the emergence of diabetes complications is investigated in this research. It highlights the manner in which diabetes compromises the immune system's adaptive as well as innate responses. Key defects in innate immunity include impaired pathogen recognition, and dysfunctional behavior of macrophages, neutrophils, and natural killer (NK) cells. Additionally, the complement system is dysregulated, and cytokine production is altered, affecting overall immune signaling. The study investigates the dysfunction of several T and B cell subsets, such as CD4+ T cells, CD8+ T cells, regulatory T cells, and B cells, in relation to adaptive immunity. These dysfunctions collectively contribute to chronic inflammation, reduced pathogen clearance, and increased susceptibility to infections, ultimately exacerbating diabetes complications. Developing targeted therapies to reduce diabetes complications and enhance patient outcomes requires an understanding of these mechanisms.