Diabetes mellitus is an acutely debilitating ailment affecting a large population of the world. At present, over 415 million people around the world including 7 million people in Pakistan suffering from diabetes. Homocysteine is an amino acid that is inversely related to vitamin B12 and folate, and raised level of homocysteine is implicated in many adverse health conditions. In this study, the potential role of homocysteine in diabetes and the epidemiology of hyperhomocysteinaemia, and vitamin B12 and folate deficiency is reviewed along with the impact of folate and vitamin B12 in regulation of homocysteine level. Deficiency of vitamin B12 and folate is rare in developed countries and the countries which adopted fortification programs, but deficiency of these vitamins is found to be highly prevalent in developing world, particularly in Pakistan. Several studies have found an association of high homocysteine levels and diabetes, but a few studies found contrary results. Hence, further epidemiological studies are recommended for homocysteine involvement in diabetes and vitamin B12 and folate deficiency, so that an urgent action can be taken to control the hyperhomocysteinaemia and consequently the ever increasing burden of disease and specifically diabetes.