Background: While the exact mechanism remains unclear, type 2 diabetes mellitus (T2DM) has been shown to increase the risk of sarcopenia that is characterized by decreased muscle mass, strength, and function. This study aimed to identify the pathophysiological role of lncRNAs in diabetic sarcopenia. Methods: Whole-transcriptome RNA sequencing was performed on the gastrocnemius from the overt diabetes-induced sarcopenia model of db/db mice. Informatics and co-expression networks were performed to predict key lncRNAs and their potential regulation circuits in diabetes-induced sarcopenia. To determine the specific function of lncRNA Gm20743, the detection of Mito-Sox, reactive oxygen species, Ethynyl-2′-deoxyuridine, and myosin heavy chain was performed in overexpressed-Gm20743 C2C12 cells. Results: RNA-seq data and informatics revealed the key lncRNA-mRNA interactions and indicated a potential regulatory role of lncRNAs. Meanwhile, we characterized three core candidate lncRNAs Gm20743, Gm35438, and 1700047G03Rik and their potential function. Furthermore, the results suggested lncRNA Gm20743 may be involved in regulating mitochondrial function, oxidative stress, cell proliferation, and myotube differentiation in skeletal muscle cells. Conclusion: These findings significantly improve our understanding of lncRNAs that may mediate muscle mass, strength, and function in diabetes and represent potential therapeutic targets for diabetes-induced sarcopenia.