The risk of hypoglycemia with anti-hyperglycemic agents is an important limiting factor in the management of type 1 (T1DM) and type 2 (T2DM) diabetes mellitus. While hypoglycemia is more common in T1DM, the incidence is high in T2DM patients who use insulin or secretagogues, particularly patients with longer duration of diabetes. The underlying cause of hypoglycemia in diabetes is a complex interaction between hyperinsulinemia and compromised physiologic and behavioral responses to falling glucose levels. Pancreatic dysfunction also causes loss of normal therapeutic response to hypoglycemia—a reduction in circulating insulin (in T2DM only) and an increase in glucagon secretion. In T1DM and advanced T2DM, the third defense against hypoglycemia is increase in adrenomedullary sympathoadrenal epinephrine secretion, which is also compromised, causing the syndrome of defective glucose counterregulation. Diminished increase in epinephrine, also called hypoglycemia-associated autonomic failure (HAAF), is largely responsible for defective glucose counterregulation. HAAF can result in recurrent hypoglycemia and lowering of glycemic threshold that typically triggers sympathoadrenal response to hypoglycemia. This results in hypoglycemia without warning symptoms, or “hypoglycemia unawareness,” which increases the risk of severe hypoglycemia associated with substantial morbidity and mortality. Long-term effects of severe hypoglycemia, aside from causing accidents, may include adverse cardiovascular outcomes and cognitive impairment. To reduce the impact of hypoglycemia, it is important to identify patients at risk and use careful consideration when choosing antidiabetes medications. Newer insulin analogs that more accurately replicate endogenous insulin secretion and incretin therapies that cause glucose-sensitive insulin secretion may ultimately reduce the risk of hypoglycemia.