Diabetes comes from the Greek word which means “siphon”. There are two distinct disorders that share the first name diabetes: diabetes mellitus and diabetes insipidus. This is because both disorders cause polyuria, or excessive urine output. Diabetes insipidus is a disorder of urine concentration (see "Regulation of Water Balance").
The urinary symptom of polyuria may often be the first indication that a person has diabetes mellitus. Diabetes mellitus is a disorder of blood glucose regulation, which results from a deficiency in the action of the hormone insulin. This may be due to autoimmune destruction of the insulin-secreting cells of the pancreas (type 1 diabetes mellitus) or it may result from a problem in the responsiveness of tissues to insulin, known as insulin resistance (type 2 diabetes mellitus). With either disorder, the result is hyperglycemia, or high levels of glucose in the plasma.
How does hyperglycemia cause excessive urine
production? To answer this, we need to look at the renal handling
of glucose. Being a small molecule, glucose is freely filtered.
The glucose that is filtered is then completely reabsorbed in the
proximal tubule, by the mechanism shown in the figure at the
right. Under normal circumstances, 100% of the glucose that is
filtered is reabsorbed. Glucose reabsorption involves transport
proteins (specifically, sodium-glucose cotransporters) that
require specific binding. As shown in the figure below,
hyperglycemia causes such a high filtered load of glucose,
that it exceeds the capacity of the kidney tubules to reabsorb it.
(Filtered load is the amount filtered, and is calculated by
multiplying the plasma concentration by the GFR). The
transport proteins become saturated, and the result is
that glucose ends up in the urine. Glucose is a solute that draws
water into the urine by osmosis. Thus, hyperglycemia
causes a diabetic to produce a high volume of glucose-containing
urine.

Interestingly, new drugs are being developed that exploit glucose loss in the urine as a means to counteract hyperglycemia in diabetes mellitus. These new drugs are inhibitors of the sodium-glucose cotransporter, SGLT2, that is specific to the kidney tubules. Greater than 90% of renal glucose reabsorption occurs via SGLT2. Canagliflozin is the first SGLT2 inhibitor to gain FDA approval. In trials, canagliflozin was shown to reduce various measures of hyperglycemia and to promote weight loss. There is excitement about these drugs because they improve glycemic control via a mechanism that is independent of insulin secretion or action.
The main adverse effect with SGLT2 inhibitors is an increased risk of genital and urinary tract infections. There is also a potential for adverse effects due to increased diuresis.