Diabetes, a leading metabolic disorder characterized by impaired insulin function, predisposes individuals to fungal infections due to weakened immunity, altered gut microbiota, and other factors, leading to delayed healing. Among these infections, candidiasis, caused predominantly by Candida albicans, poses significant challenges due to antifungal resistance and toxicity associated with conventional treatments. Nano-antifungal formulations offer a promising therapeutic approach. Long-term medication release, increased stability, targeting of infected tissue, decreased off-target side effects, extended blood residence time, and enhanced treatment efficacy are the various benefits of nanoparticles. Hence, the review emphasizes the advanced use of nano-materials, such as metallic (silver, titanium, zinc, gold, and tin), polymeric (chitosan), and lipid-based (liposome) nanoparticles, having antidiabetic properties, which are and could be used for the enhancement of anticandidal activity either alone or with encapsulation of antifungals in nano-formulations, as till now, very few studies have been conducted for their antifungal effects on diabetic patients. Treating C. albicans in individuals with diabetes has shown to be quite challenging, as for antifungal therapy to be effective in diabetic individuals, blood glucose levels must be controlled, thus, the formulated nanoparticle should also possess antidiabetic activity, as discussed in this review. This review highlights recent advancements in nano-based drug delivery systems for diabetic patients with fungal infections, focusing on their mechanisms, efficacy, safety, and future clinical potential. With nano-formulations acting as a nanocarrier with antidiabetic and antifungal activity among the most prevalent fungus species, this strategy would significantly decrease the probability of infections associated with diabetic patients.