Diabetes occurs when beta-cells no longer function properly or have been destroyed. Mitochondria can be involved in both these processes: via calcium regulation:

Cell Calcium. 2011 Dec;50(6):481-90. doi: 10.1016/j.ceca.2011.08.005. Epub 2011 Sep 23.

The central role of calcium in the effects of cytokines on beta-cell function: implications for type 1 and type 2 diabetes.

Ramadan JW, Steiner SR, O'Neill CM, Nunemaker CS.

http://www.ncbi.nlm.nih.gov/pubmed/21944825

and via their involvement in apoptosis:

PLoS Pathog. 2011 Sep;7(9):e1002267. doi: 10.1371/journal.ppat.1002267. Epub 2011 Sep 22.

Exposure to the viral by-product dsRNA or Coxsackievirus B5 triggers pancreatic beta cell apoptosis via a Bim / Mcl-1 imbalance.

Colli ML, Nogueira TC, Allagnat F, Cunha DA, Gurzov EN, Cardozo AK, Roivainen M, Op de Beeck A, Eizirik DL.

http://www.ncbi.nlm.nih.gov/pubmed/21977009

PLoS One. 2011;6(6):e20617. doi: 10.1371/journal.pone.0020617. Epub 2011 Jun 27.

Role of the mitochondria in immune-mediated apoptotic death of the human pancreatic β cell line βLox5.

Lightfoot YL, Chen J, Mathews CE.

http://www.ncbi.nlm.nih.gov/pubmed/21738580

Mutation in certain mitochondrial genes can therefore modify development of diabetes. See example:

Diabetes. 2011 Jan;60(1):355-9. doi: 10.2337/db10-1241. Epub 2010 Oct 27.

mt-Nd2(a) Modifies resistance against autoimmune type 1 diabetes in NOD mice at the level of the pancreatic β-cell.

Chen J, Gusdon AM, Piganelli J, Leiter EH, Mathews CE.

http://www.ncbi.nlm.nih.gov/pubmed/20980458