The relationships between co-morbid depression in people with diabetes and adverse outcomes including poor HbA(1c) control, adherence to medication and mortality have been examined and confirmed. However, as the awareness of the decrement to health-related quality of life (HRQOL) in people with diabetes and its clinical consequences grows, investigators have become increasingly interested in measuring HRQOL in clinical trials. Given that the psychological factors such as depression may contribute to diminished HRQOL, the present review sought to summarize the association between these variables in people with type 2 diabetes. Articles for a systematic review were obtained via a search performed using MEDLINE, EMBASE and PsycINFO (1980-2007).Fourteen articles fulfilled the inclusion criteria. Studies indicated that self-reported depressive symptoms markedly impaired HRQOL on several domains. However, depression was not related to all sub-domains of HRQOL in all studies, suggesting that the effects of depression on certain aspects of HRQOL may vary between clinical and demographic subgroups. Although a number of shortcomings identified in the current literature should be taken into account for future research, the importance of this review lies in the possibility it raises that the improvements in HRQOL and clinical practice may potentially be achieved by placing greater attention on the identification and management of depression.