Objective: Diabetes mellitus is reported to be the third most prevalent comorbidity with COVID-19, after cardio‐cerebrovascular disease and hypertension. Furthermore, diabetes increases the likelihood of admission to the hospital and intensive care unit and death from COVID-19. The aim of the present study was to compare the clinical manifestations and outcomes of COVID-19 in diabetic versus non-diabetic inpatients. Materials and Methods: The medical records of 6525 patients with definitive diagnosis of COVID-19 were obtained from the reference COVID-19 diagnosis laboratory from January to July 2021 in Yazd, Iran. Patients were investigated for data on onset, clinical history, and fatality rate. COVID-19-related death was defined as positive RT-PCR in at least one of three nasal samples. Data were analysed using SPSS 24. Results: Among inpatients, 21.2% were diabetic. The mean ages of diabetic and non-diabetic patients were 64.45 (±13.87) and 52.98 (±20.36) years, respectively. Diabetics were more likely to be admitted to the intensive care unit (6.8% vs. 5%, P= 0.02) and the fatality rate was higher among them than non-diabetics (22.6% vs. 12%, P< 0.001). In diabetics, the mean age of non-survivors was lower than that of survivors (62.57 vs. 70.48, P= 0.0001) and the frequency of death was higher among men than women (53% vs. 47.5%, P= 0.045). Generally, diabetes has the strongest association with COVID-19 death (P= 0.0001). Conclusion: Diabetic patients experience more adverse outcomes because of COVID-19. These findings indicate the need for special attention in relation to prevention treatment against COVID-19 in patients with diabetes.