(1) Background: To analyze incidence and in-hospital mortality (IHM) of COVID-19 needing hospital admission in Spain (2020) in patients with T2DM. (2) Methods: We conducted a retrospective cohort study. Using the Spanish Register of Specialized Care-Basic Minimum Database we estimated age-adjusted incidence rates (IR). (3) Results: We included 203,488 patients (56.77% men), of whom 45,620 (22.41%) had T2DM. Age-adjusted IRs/1000 for men with and without T2DM was 12.90 and 5.87, respectively (IRR 2.20; 95% CI 2.18–2.22; p < 0.001), and for women with and without T2DM was 9.23 and 4.27, respectively (IRR 2.16; 95% CI 2.13–2.19; p < 0.001). Crude IHM was 23.86% in people with T2DM, and 15.94% in non-T2DM people (p < 0.001). After matching, intensive-care admission (7.37% vs. 6.15%; p < 0.001) and IHM (23.37% vs. 20.41%; p < 0.001) remained higher in women with T2DM. After matching, IHM among T2DM men was 1.5% higher than among non-T2DM men (24.27% vs. 22.72%; p < 0.001). Men with T2DM had a 34% higher IHM than women with T2DM. Prevalent T2DM increased IHM among women (1.09; 95% 1.03–1.16) and men (1.05; 95% 1.01–1.10). (4) Conclusions: Incidence rates of COVID-19 needing hospital admission were higher in men vs. women, and for people with T2DM vs. non-T2DM. Men had higher IHM beside T2DM status. Prevalent T2DM was associated with higher IHM for both sexes.