Liver transplantation (LT) offers patients with decompensated cirrhosis the best chance at long-term survival. With the rising prevalence of diabetes, further clarity is needed on the impact of receiving a liver allograft from a donor with diabetes on post-LT outcomes. This study aims to evaluate the impact of donor diabetes on clinical outcomes after LT. This is a retrospective analysis of the United Network for Organ Sharing registry data of LT recipients from January 1, 2000, to December 31, 2021. Outcomes analysis was performed using Cox proportional model for all-cause mortality and graft failure. Confounding was reduced by coarsened exact matching causal inference analysis. Of 66 960 donors identified, 7178 (10.7%) had diabetes. Trend analysis revealed a longitudinal increase in the prevalence of donor diabetes ( P  < 0.001). Importantly, donor diabetes was associated with increased all-cause mortality (hazard ratio HR: 1.13; 95% confidence interval CI, 1.07-1.19; P  < 0.001) and graft failure (HR: 1.16; 95% CI, 1.11-1.22; P  < 0.001). Receiving donor organ with diabetes reduced graft survival in patients who received LT for nonalcoholic steatohepatitis cirrhosis (HR: 1.26; 95% CI, 1.13-1.41; P  < 0.001) but not other etiologies of cirrhosis. Donor diabetes was associated with worse outcomes post-LT, particularly in patients receiving LT for nonalcoholic steatohepatitis cirrhosis. Future studies are needed to better understand the mechanism underlying this association to develop better risk stratification and clinical practice to improve the outcomes of the transplanted patients.