Both chronic kidney disease (CKD) and type II diabetes mellitus (DM) are increasing in frequency among Western populations and both are potent risk factors for the development of anaemia. The presence of CKD and diabetes together represent the most important aetiopathogenic combination for the development of anaemia. New evidence has highlighted some of the underlying mechanisms which make diabetic patients more susceptible to dyserythropoiesis, particularly once they have developed concomitant CKD. In addition, recent publications from large-scale epidemiological studies have highlighted the impact of anaemia on diabetic patients. The purpose of this review was to focus on the pathophysiology and impact of anaemia in DM.