The gut-liver axis represents a complex, bidirectional communication network between the gastrointestinal tract and the liver, playing a central role in maintaining metabolic homeostasis. In diabetes, disruption of this axis, mediated by gut microbiota dysbiosis, impaired intestinal barrier function, and pro-inflammatory signaling, contributes significantly to insulin resistance, hepatic steatosis, and systemic metabolic dysfunction. This review explores the underlying mechanisms by which microbial alterations, increased gut permeability, and inflammatory pathways influence hepatic insulin resistance and glucose metabolism. In addition to established mechanisms, emerging pathways involving neuroendocrine circuits, microbial metabolites, and immune mediators are discussed, offering deeper insight into gut-liver interactions in metabolic disease. The review also outlines therapeutic strategies targeting the gut-liver axis, including microbiota modulation, barrier function enhancement, and anti-inflammatory interventions, emphasizing their potential in advancing diabetes management. A conceptual framework is proposed to integrate these components into a precision medicine approach for metabolic regulation. Key challenges in clinical translation, including patient heterogeneity and the absence of reliable biomarkers to guide treatment decisions are also discussed to inform future research. By linking mechanistic understanding with therapeutic innovation, the review highlights the gut-liver axis as a promising target for personalized diabetes care.