More muscle mass burns more fat/sugar on a minute-to-minute basis leading to better insulin and promotes the regrowth of beta cells through stimulation of HGH.  Better growth stimulation factors overall through muscle mass, improving overall metabolism/insulin effectiveness.  Muscle keeps excess blood sugar down.  This alone is a good reason for diabetics to include some weight training in their exercise program.

Fat cells are insulin-resistant.  Fat cells are resistant to the normal action of insulin as it tries to control the body's use of blood sugar.  For every extra fat cell you fill, the body needs to produce more and more excess insulin in an attempt to keep the fat cells nourished.  The excess insulin goes to the liver.  The liver converts the excess insulin into triglycerides.  Triglycerides interfere with insulin sensitivity, resulting in more excess insulin.  This creates a vicious cycle which is off and running.

This vicious cycle is a good reason for diabetics to have a regular exercise program that includes gym workouts.  Diabetics might also consider aerobic exercise such as walking.  This is because exercise forces insulin to the muscles.  The blood sugar is then burned up at the muscle level.

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