Background: Diabetes mellitus significantly elevates the risk of sepsis and exacerbates its clinical outcomes, leading to increased mortality rates. Despite the importance of this association, the demographic and geographic patterns influencing it remain inadequately understood. Methods: Utilizing data from CDC WONDER (1999–2020), we conducted an analysis of mortality trends among U.S. adults aged 65 and older, stratified by gender, race/ethnicity, and geographic region. Age-adjusted mortality rates (AAMRs) and annual percentage changes (APCs) were evaluated using the Joinpoint Regression methodology. Results: Between 1999 and 2020, there were a total of 287,738 deaths attributed to diabetes and sepsis. The AAMR decreased from 33.6 per 100,000 population in 1999 to 27.7 in 2014; however, it subsequently surged to 38.4 by 2020 (APC: 13.65). The male AAMRs reached a peak of 39.1 in 2005, declined to 31.2 in 2012, and then increased to 46.9 in 2020 (APC 12.29). Female AAMRs decreased from 32.6 in 1999 to 24.8 in 2018, before rising again to 31.9 in 2020 (APC 13.66). Among African Americans, mortality declined to 46.3 in 2019 but experienced a sharp increase to 65.7 in 2020 (APC 20.52). The Hispanic AAMR also increased during this period (APC 25.05). The southern region consistently exhibited the highest mortality rates, rising from 31.7 in 2018 to 42.5 in 2020 (APC 13.69), with notable rises observed in the Midwest (APC 14.59). All these trends were statistically significant ( p < 0.05). Furthermore, non-metropolitan areas consistently demonstrated higher mortality rates, with significant increases observed between 2018 and 2020. Conclusion: The mortality rates associated with diabetes-related sepsis have recently risen, particularly between 2018 and 2020, thereby highlighting significant health disparities. It is essential to implement targeted healthcare interventions.