This study explores the prevalence of, and factors associated with, likely depression and diabetes distress in adults with type 2 diabetes in a large, national sample. Australian National Diabetes Audit data were analysed from adults with type 2 diabetes attending 50 diabetes centres. The Brief Case find for Depression and Diabetes Distress Score 17 were administered to screen for likely depression and diabetes-related distress, respectively. A total of 2,552 adults with type 2 diabetes participated: (mean ± SD) age was 63 ± 13 years, diabetes duration was 12 ± 10 years, and HbA1c was 8 ± 2%. Twenty-nine percent of patients had likely depression, 7% had high diabetes distress, and 5% had both. Difficulty following dietary recommendations, smoking, forgetting medications, and diabetes distress were all associated with greater odds of depression whereas higher own health rating was associated with lower odds (all p < 0.02). Female gender, increasing HbA1c, insulin use, difficulty following dietary recommendations and depression were all associated with greater odds of diabetes distress & older age, higher own health rating and monitoring blood glucose levels as recommended were associated with lower odds (all p < 0.04). Depression was associated with sub-optimal self-care, while diabetes distress was associated with higher HbA1c and sub-optimal self-care.