Acyl ghrelin, a 28-amino acid peptide hormone, is the endogenous cognate ligand for the growth hormone secretagogue receptor. Ghrelin is involved in stimulating growth hormone release, eliciting feeding behavior, inducing adiposity and stimulating gastrointestinal motility. Ghrelin is unique for its post-translational modification of O-n-octanoylation at serine 3 through ghrelin O-acyltransferase, and is the only peripheral signal to enhance food intake. Plasma ghrelin levels manifest "biphasic changes" in diabetes mellitus (DM). In the early stage of DM, the stomach significantly increases the secretion of ghrelin into the plasma, and elevated plasma ghrelin levels are correlated with diabetic hyperphagic feeding and accelerated gastrointestinal motility. In the late stage of DM, plasma ghrelin levels may be lower, which might be linked with anorexia/muscle wasting, delayed gastrointestinal transit, and even gastroparesis. Therefore, the unique ghrelin system may be the most important player compared to the other hindgut hormones participating in the "entero-insular axis". Further studies using either knockdown or knockout of ghrelin gene products and ghrelin O-acyltransferase may unravel the pathogenesis of DM, and show benefits in combating this disease and metabolic syndrome.