Background: Obstructive sleep apnea (OSA) and type 2 diabetes mellitus (T2DM) are two interacting epidemics both with high prevalence and morbidity. Both epidemiologic and clinical studies suggest that the majority of patients with T2DM also have OSA and untreated OSA in these patients results in poor glycemic control leading to acceleration of diabetes-related complications. Objectives: To assess the prevalence and severity of OSA in T2DM patients and to assess the impact of OSA treatment on presenting symptoms and hemoglobin A1c (HbA1c). Methods: We performed polysomnography (PSG) studies and measured HbA1c in 62 consecutive patients with T2DM that were referred from various subspecialty clinics from July 2011 to August 2013. Results: In our 62 diabetic patients, 59 (95.2%) had abnormal PSG. Based on Apnea–Hypopnea Index (AHI) score, 3 (5.1%) patients had mild, 28 (47.5%) had moderate, and 28 (47.5%) had severe OSA. The mean AHI of diabetic patients was significantly more than nondiabetic patients, i.e., 25.7 versus 19.7 (P = 0.001). Variables that significantly correlated with the presence of OSA include age, gender, body mass index (BMI), hypertension, diabetes, and cardiovascular disease (P < 0.05); however, on logistic regression only BMI, hypertension, and nocturia correlated with OSA. Overall, 59% of diabetic patients showed improvement in their glycemic control as measured by HbA1c with continuous positive airway pressure (CPAP) treatment. Significant, moderate, and mild categories of treatment response were respectively observed in 7%, 20%, and 32% of patients. Conclusion: Treatment of OSA with CPAP reduces HbA1c in a significant number of diabetics.