This review explores the pivotal role of the nucleotide-binding oligomerization domain (NOD)-like receptor protein 3 (NLRP3) inflammasome in the pathogenesis of diabetes and its complications, highlighting the therapeutic potential of various oral hypoglycemic drugs targeting this pathway. NLRP3 inflammasome activation, triggered by metabolic stressors like hyperglycemia, hyperlipidemia, and free fatty acids (FFAs), leads to the release of pro-inflammatory cytokines interleukin-1β and interleukin-18, driving insulin resistance, pancreatic β-cell dysfunction, and systemic inflammation. These processes contribute to diabetic complications such as nephropathy, neuropathy, retinopathy, and cardiovascular diseases (CVD). Here we discuss the various transcriptional, epigenetic, and gut microbiome mediated regulation of NLRP3 activation in diabetes. Different classes of oral hypoglycemic drugs modulate NLRP3 inflammasome activity through various mechanisms: sulfonylureas inhibit NLRP3 activation and reduce inflammatory cytokine levels; sodium-glucose co-transporter 2 inhibitors (SGLT2i) suppress inflammasome activity by reducing oxidative stress and modulating intracellular signaling pathways; dipeptidyl peptidase-4 inhibitors mitigate inflammasome activation, protecting against renal and vascular complications; glucagon-like peptide-1 receptor agonists attenuate NLRP3 activity, reducing inflammation and improving metabolic outcomes; alpha-glucosidase inhibitors and thiazolidinediones exhibit anti-inflammatory properties by directly inhibiting NLRP3 activation. Agents that specifically target NLRP3 and inhibit their activation have been identified recently such as MCC950, Anakinra, CY-09, and many more. Targeting the NLRP3 inflammasome, thus, presents a promising strategy for managing diabetes and its complications, with oral hypoglycemic drugs offering dual benefits of glycemic control and inflammation reduction. Further research into the specific mechanisms and long-term effects of these drugs on NLRP3 inflammasome activity is warranted.