Recent evidence highlights an important role of ghrelin in glucose homeostasis. In this review we provide a detailed summary of recent advances in this field. We describe the effects of ghrelin on all aspects of glucose homeostasis including glucose-stimulated insulin secretion, hepatic glucose production and insulin stimulated glucose disposal in the peripheral tissues. The existing evidence suggests ghrelin primarily inhibits insulin release from the pancreas and we highlight an important mechanism involving AMPK-UCP2 ATP-stimulated potassium channels and intracellular calcium regulation. Ghrelin increases hepatic glucose production and prevents glucose disposal in muscle and adipose tissues, which collectively leads to hyperglycemia and impaired glucose tolerance. We discuss the important role ghrelin plays in glucose homeostasis during different metabolic states. During severe calorie restriction, ghrelin increases blood glucose concentrations in order to maintain glucose homeostasis. In diet-induced obesity, ghrelin exacerbates hyperglycemia and promotes a diabetic phenotype.