Living with type 2 diabetes (T2D) can elicit psychological distress and diminish quality of life (QoL) in patients. Research has also elucidated a link between sleep and quality of life. Thus, the current review aimed to clarify the relationship between sleep and QoL in T2D patients, and determine the prevalence of sleep problems in this cohort. A systematic search across four databases yielded 23 relevant studies, which were synthesized narratively. Between 17.8 and 79% of patients had sleep problems, and a direct, significant relationship was established between sleep and QoL. An indirect relationship between sleep and QoL was established through exacerbation of psychological factors and biological symptoms of T2D. Findings are clinically relevant and highlight the importance of screening for sleep problems during routine patient appointments. Future research should employ either longitudinal or prospective study designs to enable further understanding of the intricacies of this relationship.