Aims  Erectile dysfunction (ED) is a common comorbidity in men with diabetes mellitus. Tadalafil 10 or 20 mg taken on demand is efficacious and safe for men with diabetes and ED. Recently, continuous treatment with tadalafil has been proposed, addressing ED management as any other chronic condition. This study examined whether once‐daily tadalafil 2.5 and 5 mg is efficacious for men with diabetes and ED.Methods  This randomized, double‐blind, placebo‐controlled, multicentre, 12‐week study enrolled 298 men with diabetes and ED to once‐daily treatment with placebo, tadalafil 2.5 mg or tadalafil 5 mg. Primary efficacy measures were International Index of Erectile Function Erectile Function (IIEF EF) Domain score, and patient success rates for vaginal penetration and completion of intercourse. Patient satisfaction, endothelial function biomarkers, and safety were also assessed.Results  Patients receiving either dose of tadalafil had clinically and statistically significant improvements in IIEF EF and statistically significant improvements in mean success rates for vaginal penetration, completion of intercourse, and overall treatment satisfaction (P ≤ 0.005 tadalafil vs. placebo, all measures). Endothelial dysfunction biomarkers were unchanged. The most common adverse events were headache, back pain and dyspepsia.Conclusions  In this first study of men with diabetes and ED, once‐daily tadalafil 2.5 and 5 mg was efficacious and well tolerated, suggesting this may be an alternative to on‐demand treatment for some men, eliminating the need to plan sex within a limited timeframe.