A systematic review of the literature was conducted to review and evaluate the evidence supporting a liberalized diet for the management of diabetes mellitus in aged care homes and examine the effect of this on glycaemia, nutritional status and diabetes comorbidity risk factors. A 3 step search of eight databases followed by independent data extraction and quality assessment by two authors was undertaken. Studies which compared therapeutic diets to a liberalized diet or observation studies reviewing the effects of therapeutic diets on glycaemia and nutritional status were included. Of the 546 studies identified, six met the inclusion criteria. Methodological quality of the studies was rated poor and the majority concluded no statistically significant change in diabetes management outcomes with a liberalized diet, but modest increases in glycaemia were observed. Inadequate data was available to determine effects of diet change on nutritional status or diabetes risk factors. Overall studies were in support of a liberalized diet but due to the low quality of the evidence and a lack of significant findings it may not be appropriate to extrapolate these conclusions to inform dietetic practice.