Background For people with diabetes mellitus to achieve optimal glycaemic control, motivation to perform self-management is important. The research team wanted to determine whether or not psychological interventions are clinically effective and cost-effective in increasing self-management and improving glycaemic control. Objectives The first objective was to determine the clinical effectiveness of psychological interventions for people with type 1 diabetes mellitus and people with type 2 diabetes mellitus so that they have improved (1) glycated haemoglobin levels, (2) diabetes self-management and (3) quality of life, and fewer depressive symptoms. The second objective was to determine the cost-effectiveness of psychological interventions. Data sources The following databases were accessed (searches took place between 2003 and 2016): MEDLINE, Cumulative Index to Nursing and Allied Health Literature (CINAHL), Cochrane Library, PsycINFO, EMBASE, Cochrane Controlled Trials Register, Web of Science, and Dissertation Abstracts International. Diabetes conference abstracts, reference lists of included studies and Clinicaltrials.gov trial registry were also searched. Review methods Systematic review, aggregate meta-analysis, network meta-analysis, individual patient data meta-analysis and cost-effectiveness modelling were all used. Risk of bias of randomised and non-randomised controlled trials was assessed using the Cochrane Handbook (Higgins JP, Altman DG, Gøtzsche PC, Jüni P, Moher D, Oxman AD, et al. The Cochrane Collaboration’s tool for assessing risk of bias in randomised trials. BMJ 2011;343:d5928). Design Systematic review, meta-analysis, cost-effectiveness analysis and patient and public consultation were all used. Setting Settings in primary or secondary care were included. Participants Adolescents and children with type 1 diabetes mellitus and adults with types 1 and 2 diabetes mellitus were included. Interventions The interventions used were psychological treatments, including and not restricted to cognitive–behavioural therapy, counselling, family therapy and psychotherapy. Main outcome measures Glycated haemoglobin levels, self-management behaviours, body mass index, blood pressure levels, depressive symptoms and quality of life were all used as outcome measures. Results A total of 96 studies were included in the systematic review (n = 18,659 participants). In random-effects meta-analysis, data on glycated haemoglobin levels were available for seven studies conducted in adults with type 1 diabetes mellitus (n = 851 participants) that demonstrated a pooled mean difference of –0.13 (95% confidence interval –0.33 to 0.07), a non-significant decrease in favour of psychological treatment; 18 studies conducted in adolescents/children with type 1 diabetes mellitus (n = 2583 participants) that demonstrated a pooled mean difference of 0.00 (95% confidence interval –0.18 to 0.18), indicating no change; and 49 studies conducted in adults with type 2 diabetes mellitus (n = 12,009 participants) that demonstrated a pooled mean difference of –0.21 (95% confidence interval –0.31 to –0.10), equivalent to reduction in glycated haemoglobin levels of –0.33% or ≈3.5 mmol/mol. For type 2 diabetes mellitus, there was evidence that psychological interventions improved dietary behaviour and quality of life but not blood pressure, body mass index or depressive symptoms. The results of the network meta-analysis, which considers direct and indirect effects of multiple treatment comparisons, suggest that, for adults with type 1 diabetes mellitus (7 studies; 968 participants), attention control and cognitive–behavioural therapy are clinically effective and cognitive–behavioural therapy is cost-effective. For adults with type 2 diabetes mellitus (49 studies; 12,409 participants), cognitive–behavioural therapy and counselling are effective and cognitive–behavioural therapy is potentially cost-effective. The results of the individual patient data meta-analysis for adolescents/children with type 1 diabetes mellitus (9 studies; 1392 participants) suggest that there were main effects for age and diabetes duration. For adults with type 2 diabetes mellitus (19 studies; 3639 participants), baseline glycated haemoglobin levels moderated treatment outcome. Limitations Aggregate meta-analysis was limited to glycaemic control for type 1 diabetes mellitus. It was not possible to model cost-effectiveness for adolescents/children with type 1 diabetes mellitus and modelling for type 2 diabetes mellitus involved substantial uncertainty. The individual patient data meta-analysis included only 40–50% of studies. Conclusions This review suggests that psychological treatments offer minimal clinical benefit in improving glycated haemoglobin levels for adults with type 2 diabetes mellitus. However, there was no evidence of benefit compared with control interventions in improving glycated haemoglobin levels for people with type 1 diabetes mellitus. Future work Future work should consider the competency of the interventionists delivering a therapy and psychological approaches that are matched to a person and their life course. Study registration This study is registered as PROSPERO CRD42016033619. Funding This project was funded by the National Institute for Health Research (NIHR) Health Technology Assessment programme and will be published in full in Health Technology Assessment; Vol. 24, No. 28. See the NIHR Journals Library website for further project information.