Purpose: The prevalence of colorectal cancer is higher among patients with type 2 diabetes mellitus (T2D) than among patients without diabetes. Furthermore, men are at higher risk for developing colorectal cancer than women in the general population and also subsite-specific risks differ per sex. The aim was to evaluate the impact of T2D on these associations. Methods: A population-based matched cohort study was performed using data from the PHARMO Database Network. Patients with T2D were selected and matched (1:4) to diabetes free controls. Cox proportional hazards models were used to estimate hazard ratios (HRs) for CRC and its subsites. HRs were determined per sex and adjusted for age and socioeconomic status. The ratio of distal versus proximal colon cancer was calculated for people with T2D and controls per sex and stratified by age. Results: Over 55,000 people with T2D were matched to > 215,000 diabetes free controls. Men and women with T2D were 1.3 times more likely to develop colorectal cancer compared to controls. Men with T2D were at higher risk to develop distal colon cancer (hazard ratio (95% confidence interval), 1.42 (1.08–1.88)), and women with T2D were at higher risk for developing proximal colon cancer (hazard ratio (95% confidence interval), 1.58 (1.13–2.19)). For rectal cancer, no statistically significant risk was observed for both men and women. Conclusions: Sex-specific screening strategies and prevention protocols should be considered for people with T2D. More tailored screening strategies may optimize the effectiveness of colorectal cancer screening in terms of reducing incidence and mortality.