Approximately 16 million people in the United States have diabetes, and the World Health Organization has estimated that the worldwide prevalence of diabetes will more than double from 1995 to 2025. Type 2 diabetes, the most common form of diabetes, may be 2 to 4 times more prevalent in patients with severe mental disorders. Within the psychiatric community, there is a great deal of concern about diabetes as a potential side effect of antipsychotic agents. An important population to remember in the context of treatment-emergent hyperglycemia is the 20 million people with impaired glucose tolerance (IGT) (fasting plasma glucose > 110 mg/dL and < 126 mg/dL or 2-hour postload glucose > 140 mg/dL and < 200 mg/dL according to the American Diabetes Association). This prediabetic condition has a 5% to 10% annual risk of converting to diabetes. One hypothesis for antipsychotic treatment-emergent diabetes during double-blind, randomized, controlled trials is that people who develop diabetes soon after the initiation of drug therapy for schizophrenia may have had undiagnosed IGT or diabetes before they started treatment. The emergence of diabetes in clinical practice may be due to an observation effect, but because the incidence of diabetes is greater in people with severe mental illnesses, it is crucial for psychiatrists to be aware of national guidelines for the diagnosis and treatment of type 2 diabetes.