Vitamin D has been widely studied for its implications on type 2 diabetes mellitus, a chronic condition characterized by insulin resistance, inflammation, and metabolic dysfunction. This review explores the molecular mechanisms underpinning vitamin D’s effects on glucose metabolism, inflammation, and adipogenesis, while assessing its potential clinical applications in type 2 diabetes. In its 1,25-dihydroxyvitamin D3 form, vitamin D modulates various metabolic processes, affecting proinflammatory cytokines and activating the AMPK pathway, inhibiting mTOR signaling, and promoting adipocyte differentiation. These effects enhance insulin sensitivity and reduce chronic inflammation, key contributors to metabolic dysfunction. In this context, the progression of prediabetes has been linked to vitamin D, which limits pathological progression and increases the likelihood of restoring a normal metabolic state, crucial in diabetes progression. Moreover, vitamin D has been reported to reduce the likelihood of developing diabetes by 15%, particularly in doses higher than the traditional recommendations for bone health. Despite promising evidence, discrepancies in study designs, serum vitamin D measurements, and population-specific factors highlight the need for standardized methodologies and personalized approaches. In conclusion, vitamin D has complementary therapeutic potential in treating type 2 diabetes, revealing gaps in research, such as optimal dosing and long-term effects across populations. Future studies should integrate molecular insights into clinical practice to optimize vitamin D’s impact on metabolic health.