Depression is a significant comorbid condition in diabetes. Individuals with type 2 diabetes (T2DM) are 2 times more likely to experience depression or elevated depressive symptoms compared to those without T2DM. The aims of this state of the science review were to summarize the putative links between diabetes and depression and review empirically supported treatments of depression in diabetes. Findings suggest that a bidirectional association between depression and T2DM exists and that several biological and psychosocial mediators underlie these conditions. Available data indicate that conventional treatments (antidepressant medication, cognitive behavioral therapy, and collaborative care) reduce depression and symptoms of depression; however more controlled studies and development of novel therapies are needed. Glycemic outcomes have most frequently been examined, but findings have been mixed. Self-care and adherence outcomes have been less well studied. Emerging evidence suggests that these outcomes may be important targets for future depression research in T2DM.