Red blood cells (RBCs), traditionally recognized for their oxygen transport role, have garnered increasing attention for their significance as crucial contributors to the pathophysiology of diabetes mellitus. In this comprehensive review, we elucidate the multifaceted roles of RBCs as both biomarkers and mediators in diabetes mellitus. Amidst the intricate interplay of altered metabolic pathways and the diabetic milieu, RBCs manifest distinct alterations in their structure, function, and lifespan. The chronic exposure to hyperglycemia induces oxidative stress, leading to modifications in RBC physiology and membrane integrity. These modifications, including glycation of hemoglobin (HbA1c), establish RBCs as invaluable biomarkers for assessing glycemic control over extended periods. Moreover, RBCs serve as mediators in the progression of diabetic complications. Their involvement in vascular dysfunction, hemorheological changes, and inflammatory pathways contributes significantly to diabetic microangiopathy and associated complications. Exploring the therapeutic implications, this review addresses potential interventions targeting RBC abnormalities to ameliorate diabetic complications. In conclusion, comprehending the nuanced roles of RBCs as biomarkers and mediators in diabetes mellitus offers promising avenues for enhanced diagnostic precision, therapeutic interventions, and improved patient outcomes. This review consolidates the current understanding and emphasizes the imperative need for further research to harness the full potential of RBC-related insights in the realm of diabetes mellitus.