Anemia is a common finding in patients with diabetes due to the high burden of chronic kidney disease in this population. Anemia is more prevalent and is found earlier in patients with diabetes than in those with kidney disease from other causes. The increased risk of anemia in diabetes probably reflects changes in the renal tubulointerstitium associated with diabetic kidney disease, which disrupt the delicate interaction between interstitial fibroblasts, capillaries and tubular cells required for normal hemopoietic function. In particular, the uncoupling of the hemoglobin concentration from renal erythropoietin synthesis seems to be the key factor underlying the development of anemia. Systemic inflammation, functional hematinic deficiencies, erythropoietin resistance and reduced red cell survival also drive anemia in the setting of impaired renal compensation. Although anemia can be considered a marker of kidney damage, reduced hemoglobin levels independently identify diabetic patients with an increased risk of microvascular complications, cardiovascular disease and mortality. Nevertheless, a direct role in the development or progression of diabetic complications remains to be clearly established and the clinical utility of correcting anemia in diabetic patients has yet to be demonstrated in randomized controlled trials. Correction of anemia certainly improves performance and quality of life in diabetic patients. In the absence of additional data, treatment should be considered palliative, and any functional benefits must be matched against costs to the patient and the health system.