A number of studies have shown an association between diabetes and depression. However, the underlying mechanisms are still unclear. Previous findings indicate a role for the prefrontal cortex and subcortical gray matter regions in type 2 diabetes and major depressive disorder (MDD). The purpose of this study was to examine the white matter integrity in the fibers that are part of the anterior limb of internal capsule (ALIC) in MDD and diabetic subjects using diffusion tensor imaging tractography. We studied 4 groups of subjects including 1) 42 healthy controls (HC), 2) 28 MDD subjects (MD), 3) 24 patients diagnosed with type 2 diabetes without depression (DC), and 4) 22 patients diagnosed with diabetes and depression (DD). Results revealed significantly decreased fractional anisotropy (FA; P=.021) and a trend towards significant increase in radial diffusivity (RD; P=.078) of the right ALIC in depressed subjects (MD+DD) compared to non-depressed subjects (HC+DC). While there were no significant diabetes effects or interactions between depression and diabetes, subjects with high depression ratings and high hemoglobin A1c levels had the lowest mean FA values in the right ALIC. In addition, we found a significant negative correlation between FA of the left ALIC with hemoglobin A1c in diabetic subjects (DC+DD; P=.016). Our study demonstrated novel findings of white matter abnormalities of the ALIC in depression and diabetes. These findings have implications for clinical manifestations of depression and diabetes as well as their pathophysiology.