Background: COVID-19 pandemic associates with many acute and long-term effects. Hyperglycemia and diabetes are among the common comorbidities that negatively affect the outcome of COVID-19 patients. Many studies report an increase in the incidence of new-onset diabetes and diabetic ketoacidosis during the pandemic of COVID-19. Aim of the Study: This review article aimed to study the bidirectional relationship between diabetes and COVID-19 and understand the possible underlying mechanisms predisposed to diabetes in patients with COVID-19. Methods: The present work performs an online literature search on databases from PubMed, Google Scholar, Scopus, ResearchGate, and Web of Science. The search includes publications on SARS-CoV-2 or COVID-19, hyperglycemia, diabetes, and diabetic ketoacidosis. Results: There is a slight increase in the incidence of hyperglycemia and new-onset diabetes during or post COVID-19 infections. Among the proposed mechanisms of that increase are the direct and indirect effects of SARS-CoV-2 on Beta cells of the pancreas. These effects arise from viral-mediated inflammatory and immunological effects on Beta cells. Stress hyperglycemia, corticosteroid administration, obesity, and preexisting diabetes are important aggravating factors for developing diabetes in COVID-19 patients. Conclusion: The long-term follow-up is mandatory to determine the outcome of patients, who develop new-onset diabetes after COVID-19 infection