Knee osteoarthritis (OA) may be comorbid with diabetes mellitus (DM), and physical activity is a recommended lifestyle strategy for both diseases. The present study investigated the physical activity differences by intensity between knee OA patients with or without DM, and evaluated if physical activity was associated with the presence of DM in knee OA patients. A total of 183 patients (mean age 74.9 ± 6.4years) with moderate-to-severe knee OA underwent evaluation of knee function (i.e., knee flexion/extension range-of-motion, knee-extension muscle strength, and knee pain), the timed up-and-go (TUG) test, and physical activity measurement using an accelerometer. Physical activity by intensity was compared between knee OA patients with and without DM. The association between physical activity, including knee function and the TUG test time, and DM was assessed. The 2 groups (with or without DM) did not differ significantly in knee OA severity or age. Compared to knee OA patients without DM, knee OA patients with DM had a significantly lower average daily step count (p < 0.001), and significantly shorter times spent performing light-intensity physical activity (LPA; p < 0.001) and moderate-to-vigorous-intensity physical activity (MVPA; p = 0.006). After adjusting for age, sex, and body mass index, we found that a lower average daily step count and shorter LPA time significantly correlated with DM (β = -0.200, p = 0.006; β = -0.216, p = 0.004, respectively) and a longer TUG test time (β = -0.196, p = 0.014; β = -0.208, p = 0.011, respectively). A shorter MVPA time significantly correlated with lower contralateral knee-extension muscle strength (β = 0.187, p = 0.032). Knee OA patients with DM had significantly lower physical activity levels than those without DM. Furthermore, the presence of DM correlated with a lower step count and a shorter LPA time in knee OA patients.