The purpose of this study was to examine age-related differences in mood, diabetes-related distress, and functional outcomes in activities sensitive to impaired sleep in adults with type 2 diabetes mellitus (T2DM) and comorbid obstructive sleep apnea (OSA) and insomnia. This study also evaluated the associations of age, insomnia severity, and OSA severity on outcome variables. This study was a secondary analysis of pooled baseline data from 2 randomized controlled trials among adults with T2DM with symptoms of sleep disorders (N = 145,109 younger adults, 36 older adults; 46.2% male; 67.6% white). Comorbid OSA and insomnia was defined as Apnea-Hypopnea Index ≥5 events per hour and Insomnia Severity Index ≥10. Outcome variables included mood, diabetes-related distress, and functional outcomes. Older adults reported better mood, lower diabetes-related distress, and higher functional outcomes relative to younger adults (all Ps < .05). Insomnia severity was associated with worse mood (b = 2.59, P < .001) and diabetes-related distress (b = 1.40, P < .001) and lower functional outcome (b = -0.22, P < .001). Older age was associated with lower diabetes-related distress (b = -0.44, P = .040). Older age was a protective factor of mood disturbance, diabetes-related distress, and functional impairment in adults with T2DM and comorbid OSA and insomnia. Insomnia severity was associated with greater mood disturbance, diabetes-related distress, and functional impairment when OSA and insomnia coexist. The results suggest that diabetes care and education specialists should assess patients for impaired sleep.