Type 2 diabetes mellitus (T2DM) is a growing global health concern. The pathogenesis of T2DM is multifactorial and intricate, involving a complex interplay of genetic predisposition, environmental factors, and molecular interactions. Vitamin D (circulating 25-hydroxyvitamin D concentration) regulates factors crucial for T2DM, including insulin secretion, sensitivity, and inflammation. Thus, vitamin D deficiency has been linked to poor health outcomes in T2DM patients. The cholesterol-synthesizing enzyme 7-dehydrocholesterol reductase (DHCR7) represents a critical regulatory switch between cholesterol and vitamin D3 synthesis. Recent findings suggest that the enzyme DHCR7 may indicate T2DM glycolipid metabolic disorder and is associated with deficient circulating vitamin D (circulating 25-hydroxyvitamin D concentration) status. In this PRISMA-guided systematic review, articles were sourced from two databases, namely, PubMed and Cochrane Library, to evaluate the impact of vitamin D deficiency in patients with T2DM and to explore the emerging role of DHCR7 in T2DM pathogenesis. Our findings strongly indicate a positive correlation between deficient vitamin D status and poor health outcomes in T2DM patients. Finally, this systematic review presents a novel perspective on T2DM development, focusing on the interplay between T2DM-associated hyperglycemia, expression of DHCR7, and abrogation of vitamin D synthesis.