The blood delivers glucose to provide the body with energy to perform all of a person’s daily activities.
The liver converts the food a person eats into glucose. The glucose is then released into the bloodstream.
In a healthy person, the blood glucose level is regulated by several hormones, primarliy insulin. Insulin is produced by the pancreas, a small organ between the stomach and liver. The pancreas also makes other important enzymes released directly into the gut that helps digest food.
Insulin allows glucose to move out of the blood into cells throughout the body where it is used for fuel.
People with diabetes either do not produce enough insulin (type 1 diabetes) or cannot use insulin properly (type 2 diabetes), or both (which occurs with several forms of diabetes).

Type 1 diabetes (T1D): The body stops producing insulin or produces too little insulin to regulate blood glucose level.
Type 1 diabetes involves about 10% of all people with diabetes in the United States.
Type 1 diabetes is typically diagnosed during childhood or adolescence. It used to be referred to as juvenile-onset diabetes or insulin-dependent diabetes mellitus.
Type 1 diabetes can occur in an older individual due to destruction of the pancreas by alcohol, disease, or removal by surgery. It also results from progressive failure of the pancreatic beta cells, the only cell type that produces significant amounts of insulin.
People with type 1 diabetes require insulin treatment daily to sustain life.

Type 2 diabetes (T2D): Although the pancreas still secretes insulin, the body of someone with type 2 diabetes is partially or completely unable to use this insulin. This is sometimes referred to as insulin resistance. The pancreas tries to overcome this resistance by secreting more and more insulin. People with insulin resistance develop type 2 diabetes when they fail to secrete enough insulin to cope with their higher demands.
At least 90% of adult individuals with diabetes have type 2 diabetes.
Type 2 diabetes is typically diagnosed in adulthood, usually after age 45 years. It used to be called adult-onset diabetes mellitus, or non-insulin-dependent diabetes mellitus. These names are no longer used because type 2 diabetes does occur in younger people, and some people with type 2 diabetes require insulin therapy.
Type 2 diabetes is usually controlled with diet, weight loss, exercise, and oral medications. However, more than half of all people with type 2 diabetes require insulin to control their blood sugar levels at some point in the course of their illness.

Medical Author:
Robert Ferry Jr., MD; http://www.emedicinehealth.com/diabetes/article_em.htm