In recent years, increasing evidence has suggested a strong association between diabetes mellitus (DM) and hepatocellular carcinoma (HCC). To provide a quantitative assessment of this association, we performed a systematic review and meta-analysis of cohort studies. We collected studies through a literature search of Medline from January 1, 1966 and EMBASE from January 1, 1974, through July 31, 2010. Summary relative risks (SRRs) with their corresponding 95% confidence intervals (CIs) were calculated using a random-effects model. A total of 25 cohort studies that met our inclusion and exclusion criteria were included in our analysis. Among these, 18 studies showed that DM was associated with an increased incidence of HCC (SRRs = 2.01, 95% CI: 1.61-2.51), compared with individuals without DM. There was a statistically significant heterogeneity among these studies (Q = 136.68, P < 0.001, I(2) = 87.6%). Analyses subgrouped by controlling confounders revealed that the increased incidence of HCC was independent of geographic location, alcohol consumption, history of cirrhosis, or infections with hepatitis B (HBV) or hepatitis C virus (HCV). In addition, DM was also positively associated with HCC mortality (SRR = 1.56; 95% CI: 1.30-1.87), with no significant evidence of heterogeneity among studies (Q = 1.16, P = 0.56, I(2) =0%). There were no significant publication bias (P = 0.79 for Egger's regression asymmetry test). These findings strongly support a positive association between DM and increased risk of HCC in both males and females.