Diabetes mellitus (DM) is a well known complication of interferon therapy for chronic hepatitis C virus (HCV) infection, but resolution of interferon-induced DM was rarely reported. In HIV and HCV co-infected patients, only two cases of incident DM during interferon therapy were reported and both cases required permanent insulin treatment. We report the first case of HIV/HCV co-infected patient who developed diabetic ketoacidosis during treatment for chronic HCV infection with complete resolution of DM after treatment cessation. Review of reported cases indicates that pancreatic autoantibodies and human leukocyte antigen haplotypes may predict the outcome of interferon-induced diabetes.