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Diabetes mellitus (DM) is a metabolic disorder marked by persistent hyperglycemia (HG), resulting from abnormalities in insulin secretion or insulin resistance. This condition represents a major public health concern since it causes multisystem complications, including microvascular diseases, macrovascular diseases, and neuropathy. Few effective therapies are currently available. Ferroptosis, an iron-dependent mode of regulated cell death triggered by lipid peroxidation (LPO), is intricately linked to the pathogenesis, progression, and complications of DM. It has been increasingly recognised as a key mechanism underlying peripheral insulin resistance and insulin deficiency resulting from β-cell dysfunction. In this study, we systematically summarised the primary regulatory mechanisms of ferroptosis and outlined current research advancements in mechanistic insights into its role in diabetic complications. Besides, we explored how inter-organelle interactions drive ferroptosis under diabetic conditions and play pathogenic effects in diabetes and its complications. Finally, we systematically reviewed the therapeutic drugs targeting ferroptosis from the perspectives of traditional Chinese medicine (TCM) and Western medicine, respectively. This interdisciplinary integrated overview may provide a theoretical basis for future clinical transformation.