Diabetes mellitus is a serious public health problem, but the good news is that important advances are being made in prevention, detection, and treatment of diabetes. For the management of type 1 diabetes, patients require insulin administration 3-4 times a day throughout their lives and their blood sugar levels should be regularly monitored to avoid complications like retinopathy and risks of cardiovascular diseases. Although the value of lifestyle modification in obese youth is unquestioned, scant evidence for optimal treatment of type 2 diabetes in this age group exists. Despite recent therapeutic drug trials, metformin and insulin are the only medicines currently approved by the US Food and Drug Administration for the treatment of type 2 diabetes in youth. Because of recently amended pharmaceutical regulations, however, it is likely that more anti-diabetic medications soon will be added to the armamentarium of therapeutic options for youth with type 2 diabetes. Recent approaches in drug discovery have contributed to the development of new class of therapeutics like Incretin mimetics, Amylin analogues, GIP analogs, Peroxisome proliferator activated receptors, and dipeptidyl peptidase-4 inhibitor as targets for potential drugs in diabetes treatment. Subsequently, the identification and clinical investigation of bioactive substances from plants have revolutionized the research on drug discovery and lead identification for diabetes management. The development of newer generation of drugs like sulphonylureas, biguanides, alpha glucosidase inhibitors, and thiazolidinediones with significant efficacy in reducing hyperglycemia.