Thyroid disease and type 1 but also type 2 diabetes mellitus (DM) are strongly associated, and this has important clinical implications for insulin sensitivity and treatment requirements. The pathophysiological basis of this association has only recently been better elucidated. It rests on a complex interaction of common signalling pathways and, in the case of type 1 diabetes and autoimmune thyroid disease, on a linked genetic susceptibility. The pathophysiological mechanisms underlying this linked regulation are increasingly being unravelled. They are exemplified in the regulation of 5' adenosine monophosphate-activated protein kinase (AMPK), a central target not only for the modulation of insulin sensitivity but also for the feedback of thyroid hormones on appetite and energy expenditure. The present review will discuss these concepts and their consequences for the clinical care of patients with DM and thyroid disorders. Moreover, it makes reference to the added effect of metformin in suppressing TSH.