Long noncoding RNAs (lncRNAs) are a group of noncoding RNAs that are longer than 200 nucleotides without protein-coding potential. Becasuse of which these RNAs have no significant protein-coding potential, they were initially considered as “junk-products” of transcription without biological meaning. Nevertheless, recent research advancements have shown that lncRNAs are involved in many physiological processes such as cell cycle regulation, cell apoptosis and survival, cancer migration and metabolism. This review described the function of lncRNAs and the potential underlying mechanism involved in diabetes and diabetic microvascular complications. The roles of lncRNAs in the pathogenesis of type 2 diabetes mellitus have only recently been recognized, involving hepatic glucose production and insulin resistance. We further investigated the mechanisms of lncRNAs in diabetic nephropathy (DN), including the roles of lncRNAs in mesangial cells (MCs) proliferation and fibrosis, inflammatory processes, extracellular matrix accumulation in the glomeruli and tubular injury. We also discussed the potential mechanism of lncRNAs in diabetic retinopathy (DR), including aberrant neovascularization and neuronal dysfunction. This review summarized the current knowledge of the functions and underlying mechanisms of lncRNAs in type 2 diabetes mellitus and related renal and retinal complications. Accumulating evidence suggests the potential of lncRNAs as therapeutic targets for clinical applications in the management of diabetes.