This systematic review investigates the association of sCD163, a novel biomarker of macrophage activation, with type 2 diabetes mellitus (T2DM), insulin resistance, and beta-cell dysfunction. Sixteen studies (seven cross-sectional, two case-control, one nested case-control, three prospective cohort, and three experimental) were identified. Most studies demonstrated that elevated sCD163 concentrations were associated with increased insulin resistance. Cross-sectional, case-control, and nested case-control studies showed higher sCD163 in subjects with T2DM compared with healthy individuals. An 18-year follow-up prospective cohort study showed that elevated baseline sCD163 was a strong predictor of T2DM incidence. Prospective cohort studies demonstrated that baseline measures and longitudinal changes in sCD163 were positively associated with insulin resistance; however, associations with beta-cell function were inconsistent. Two experimental studies evaluated the relationship of sCD163 with T2DM and HOMA-IR after weight-reducing interventions. After very low-calorie diet treatments, sCD163 concentration declined significantly in patients with T2DM but was not associated with insulin resistance. Bariatric surgery did not significantly impact sCD163 levels. In a double-blind randomized controlled trial, resveratrol supplementation significantly reduced circulating sCD163 in T2DM patients. Current studies demonstrate the potential utility of sCD163 as an early biomarker of T2DM risk and highlight a potential mechanism linking obesity with T2DM onset.