•The benefit of screening for obstructive sleep apnea (OSA) is unclear.•Over 90% of patients with type 2 diabetes were high-risk for OSA.•Only 17% of high-risk patients initiated OSA treatment.•OSA treatment improved sleep symptoms, but not glycemic control or blood pressure.•In the absence of symptoms, there is low value for OSA screening in type 2 diabetes. As recommended by current guidelines, we tested the acceptability and impact of screening patients with type 2 diabetes for obstructive sleep apnea (OSA). In a large urban primary care practice, we instituted a telephone-based OSA screening program using a validated tool (STOP-BANG) in patients with type 2 diabetes. Patients identified as high risk were referred for diagnostic sleep testing, and those diagnosed with OSA were offered positive airway pressure (PAP) therapy. We evaluated the impact of PAP on sleep-related symptoms, glycemic control, and hospitalization rates. We identified 738 of 818 (90.1%) patients with type 2 diabetes as high risk for OSA. Only 29.2% (n = 213) of high risk patients were willing to undergo diagnostic sleep testing. The prevalence of OSA was 90.6% in this group, but only 66.0% of those with OSA initiated PAP. Patients with higher burden of sleep symptoms were more likely to pursue testing and initiate therapy. PAP use was associated with reduced sleep-related symptoms (mean Epworth sleepiness scale score declined from 8.8 to 7.3, p < .001), but did not impact hemoglobin A1c levels at one year (7.7–7.9%, p = .12). Changes in glycemic control and hospitalization rates did not differ from comparator groups. Despite a high prevalence of OSA, willingness to pursue diagnostic testing and treatment was low in an unselected type 2 diabetes population. Furthermore, glycemic control did not improve. Future screening programs should focus on patients with substantial sleep related symptoms as this group is most likely to derive benefit from treatment.