Background Diabetic patients have an increased risk of infections; however, the association between type 2 diabetes and hospital outcomes of sepsis remains controversial when the diabetes severity is not considered. We examined this association using nationwide and hospital-based databases concomitantly. Methods The first part of this study was conducted using 2 nationwide databases: the Longitudinal Cohort of Diabetes Patients and the Longitudinal Health Insurance Database 2000. The diabetic complication burden was evaluated using the adapted Diabetes Complications Severity Index score (aDCSI score). In the second part, we used the hospital-based database with laboratory data, such as initial blood glucose and HbA1c levels, to make comparisons between surviving and dead patients with type 2 diabetes and sepsis. Results The nationwide study included 19,719 type 2 diabetic sepsis patients and an equal number of non-diabetic patients. The diabetic sepsis patients had an increased odds ratio (OR) of 1.14 (95% CI 1.1-1.19) for hospital mortality. The OR for mortality increased as the complication burden increased (diabetic sepsis patients with aDCSI scores of 0, 1, 2, 3, 4, and ≥5 had ORs of 0.91, 0.87, 1.14, 1.25, 1.56, and 1.77 for mortality, respectively (all P<0.001 and P for trend <0.001)). A total of 1,054 diabetic sepsis patients were included from the hospital-based database. Initial blood glucose levels in the surviving and dead diabetic sepsis patients did not differ significantly: 273.9 ± 180.3 versus 266.1 ± 200.2 (mg/dL) (P=0.095). Moreover, the surviving diabetic sepsis patients did not have a lower HbA1c (%): 8.4 ± 2.6 versus 8.0 ± 2.5 (P=0.078). Conclusions In the case of type 2 diabetic sepsis patients, the diabetes-related complication burden is the major determinant of hospital mortality rather than the diabetes itself. Contrary to popular belief, initial blood glucose and HbA1c levels may not be as important as previously thought.