Background . Positive psychological interventions like self-efficacy, optimism, resilience, and patient well-being have a great influence on the clinically improved positive outcomes of medically ill individuals. In diabetic individuals, these positive psychological interventions have been linked with improved positive outcomes. In past decades, the importance of psychological support for diabetic individuals has been recognized and psychological counseling for such individuals has been recommended for improved positive outcomes in these individuals. Methods . The current study aims to highlight the role of nurse in managing the impact of diabetes and the effect of psychological characteristics, including self-efficacy, resilience, optimism, and the well-being of diabetic patients on the positive outcomes. Research published in recognized journals published between 1970 and 2020 relating to diabetes, psychological nursing, self-efficacy, optimism, resilience, depression, anxiety, stress, and health outcomes were searched via search engines, including SciFinder, PubMed, Scopus, Google Scholar, Web of Science, JSTOR, EBSCO, and PROTA. The study was conducted according to PRISMA guidelines and studies that did not link diabetes and psychological nursing with these issues or that lacked proper controls were excluded from the study. Results . Review of the articles indicated a significant degree of relation between psychological nursing and the physical and psychological well-being of diabetic patients. The psychological impact of diabetes, including anger, feeling loss, anxiety, and depression, are of great importance and can influence the disease state of diabetic patients. Psychotherapy assesses the patient to address the behavioral and emotional aspects of diabetes. Addressing the psychological impacts of diabetes plays a significant role in the treatment of diabetes, leading to better glycemic control. In diabetic patients, positive psychological characteristics are linked with fewer diabetic complications, reduced mortality and improved glycemic control. There are a number of ways in which a nurse can effectively manage complications associated with diabetes. Conclusions . Positive psychological interventions, self-efficacy, optimism, resilience, and the well-being of patients play significant roles in addressing the mental illnesses associated with diabetes and have shown improved positive outcomes in diabetic patients. Negative psychological characteristics like depression, anxiety, and stress are linked with poor health outcomes but can be effectively managed via psychological nursing.