Diabetes mellitus is recognised as a risk factor for carpal tunnel syndrome. The response to treatment is unclear, and may be poorer than in non-diabetic patients. Previous randomised studies of interventions for carpal tunnel syndrome have specifically excluded diabetic patients. The aim of this study was to investigate the epidemiology of carpal tunnel syndrome in diabetic patients, and compare the outcome of carpal tunnel decompression with non-diabetic patients. The primary endpoint was improvement in the QuickDASH score. The prevalence of diabetes mellitus was 11.3% (176 of 1564). Diabetic patients were more likely to have severe neurophysiological findings at presentation. Patients with diabetes had poorer QuickDASH scores at one year post-operatively (p = 0.028), although the mean difference was lower than the minimal clinically important difference for this score. After controlling for underlying differences in age and gender, there was no difference between groups in the magnitude of improvement after decompression (p = 0.481). Patients with diabetes mellitus can therefore be expected to enjoy a similar improvement in function.