The use of the sleep-promoting hormone melatonin is rapidly increasing as an assumed safe sleep aid. During the last decade, accumulating observations suggest that melatonin affects glucose homeostasis, but the precise role remains to be defined. We investigated the metabolic effects of long-term melatonin treatment in patients with type 2 diabetes including determinations of insulin sensitivity and glucose-stimulated insulin secretion. We used a double-blinded, randomized, placebo-controlled, crossover design. Seventeen male participants with type 2 diabetes completed (1) 3 months of daily melatonin treatment (10 mg) 1 h before bedtime (M) and (2) 3 months of placebo treatment 1 h before bedtime (P). At the end of each treatment period, insulin secretion was assessed by an intravenous glucose tolerance test (0.3 g/kg) (IVGTT) and insulin sensitivity was assessed by a hyperinsulinemic-euglycemic clamp (insulin infusion rate 1.5 mU/kg/min) (primary endpoints). Insulin sensitivity decreased after melatonin (3.6 [2.9-4.4] vs. 4.1 [3.2-5.2] mg/(kg × min), p = .016). During the IVGTT, the second-phase insulin response was increased after melatonin (p = .03). In conclusion, melatonin treatment of male patients with type 2 diabetes for 3 months decreased insulin sensitivity by 12%. Clinical use of melatonin treatment in dosages of 10 mg should be reserved for conditions where the benefits will outweigh the potential negative impact on insulin sensitivity.