It has been argued that persons with severe mental illness (SMI) receive poorer treatment for somatic comorbidities. This study assesses the treatment rates of glucose-lowering and cardiovascular medications among persons with incident type 2 diabetes (T2D) and SMI compared to persons with T2D without SMI. We identified persons ≥30 years old with incident diabetes (HbA1c≥ 48 mmol/mol and/or glucose ≥ 11.0 mmol/L) from 2001 through 2015 in the Copenhagen Primary Care Laboratory (CopLab) Database. The SMI group included persons with psychotic, affective, or personality disorders within five years preceding the T2D diagnosis. Using a Poisson regression model, we calculated the adjusted rate ratios (aRR) for the redemption of various glucose-lowering and cardiovascular medications up to ten years after T2D diagnosis. We identified 1,316 persons with T2D and SMI and 41,538 persons with T2D but no SMI. Despite similar glycemic control at diagnosis, persons with SMI redeemed a glucose-lowering medication more often than persons without SMI in the period 0.5–2 years after the T2D diagnosis; for example, the aRR was 1.05 (95% CI 1.00–1.11) in the period 1.5–2 years after the T2D diagnosis. This difference was mainly driven by metformin. In contrast, persons with SMI were less often treated with cardiovascular medications during the first 3 years after T2D diagnosis, e.g., in the period 1.5–2 years after T2D diagnosis, the aRR was 0.96 (95% CI 0.92–0.99). For people with SMI in addition to T2D, metformin is more likely to be used in the initial years after T2D diagnosis, while our results suggest potential room for improvement regarding the use of cardiovascular medications.