The prevalence of obesity has grown to an alarming level of at least 300 million people worldwide. Additionally, a diabetes epidemic is underway, with an estimate of 217 million people with diabetes worldwide. There are many links between excessive body weight and type 2 diabetes, and one common and fundamental cause of both epidemics is an unhealthy diet. Research to identify and promote diets that protect individuals from obesity and type 2 diabetes is urgently needed. The Mediterranean diet, a concept developed in the 1950s, refers to dietary habits of individuals from the Mediterranean basin. The Mediterranean diet is an eating pattern that successfully combines pleasant taste and positive health effects. The Mediterranean diet does not stand for a homogenous and exclusive model among the Mediterranean basin population but rather represents a set of healthy dietary habits, including high consumption of vegetables and fresh fruits and the use of olive oil as the main source of fat. Evidence from epidemiological studies supports a protective effect of this dietary pattern on weight gain and the development of type 2 diabetes. Several mechanistic explanations link characteristic components of the Mediterranean diet with obesity and type 2 diabetes. This review will discuss potential mechanisms by which the Mediterranean diet protects individuals from both diseases.