Observational studies and meta-analyses of randomized clinical trials data have revealed a 10-12% increased risk of new-onset diabetes (NOD) associated with statin therapy; the risk is increased with intensive treatment regimens and in people with features of the metabolic syndrome or prediabetes. The purpose of this review is to provide an updated summary of what is known about the potential mechanisms for the diabetogenic effect of statins. Hydroxyl methyl glutaryl coenzyme A reductase (HMGCoAR) is the target of statin therapy and the activity of this key enzyme in cholesterol synthesis is reduced by statins in a partial and reversible way. Mendelian randomization studies suggest that the effect of statins on glucose homeostasis reflect reduced activity of HMGCoAR. In vitro and in vivo data indicate that statins reduce synthesis of mevalonate pathway products and increase cholesterol loading, leading to impaired β-cell function and decreased insulin sensitivity and insulin release. While this effect has been thought to be a drug class effect, recent insights suggest that pravastatin and pitavastatin could exhibit neutral effects on glycaemic parameters in patients with and without diabetes mellitus. The mechanisms by which statins might lead to the development of NOD are unclear. The inhibition of HMGCoAR activity by statins appears to be a key mechanism. It is difficult to offer a comprehensive view regarding the diabetogenic effect of statins because our understanding of the most widely recognized potential mechanisms, i.e. underlying statin-induced reduction of insulin sensitivity and/or insulin secretion, is still far from complete. The existence of this dual mechanism is supported by the results of a study in a large group of non-diabetic men, showing that a 46% higher risk of NOD in statin users compared to non-users was accompanied by a significant 12% reduction in insulin secretion and a 24.3% increase in insulin resistance. Although statin therapy is associated with a modest increase in the risk of NOD (about one per thousand patient-years), patients should be reassured that the benefits of statins in preventing cardiovascular disease (CVD) events far outweigh the potential risk from elevation in plasma glucose.