Ultra-processed foods (UPFs) are foods that have undergone extensive industrial processing with the addition of various substances in order to make them more tasty, eye-catching, and easy to consume. UPFs are usually rich in sugars, salt, and saturated fat, whereas they lack essential nutrients. The aim of this review is to elaborate upon the current evidence associating overconsumption of UPFs with the development of type 2 diabetes mellitus (T2DM). We will discuss data interconnecting UPFs and T2DM risk and will further describe specific ingredients that have been suggested to increase this risk. In addition, we will thoroughly explain how additives, such as emulsifiers or sweeteners, or other compounds formed during manufacturing, such as acrylamide and acrolein, and during packaging, such as bisphenol-A, are proposed to be implicated in the pathogenesis of insulin resistance and T2DM.