Type 2 diabetes mellitus (T2DM) is a multifaceted metabolic syndrome defined through the dysfunction of pancreatic β-cells driven by a confluence of genetic and environmental elements. Insulin resistance, mediated by interleukins and other inflammatory elements, is one of the key factors contributing to the progression of T2DM. Many essential oils derived from dietary plants are beneficial against various chronic diseases. We reviewed the anti-diabetic properties of dietary plant-derived essential oil compounds, with a focus on their molecular mechanisms by modulating specific signaling pathways and other critical inflammatory mediators involved in insulin resistance. High-quality literature published in the last 12 years, from 2010 to 2022, was collected from the Scopus, Web of Science, PubMed, and Embase databases using the search terms "dietary plants," "essential oils," "anti-diabetic," "insulin resistance," "antihyperglycemic," "T2DM," "anti-diabetic essential oils," and anti-diabetic mechanism." According to the results, the essential oil compounds, including cinnamaldehyde, carvacrol, zingerone, sclareol, zerumbone, myrtenol, thujone, geraniol, citral, eugenol, thymoquinone, thymol, citronellol, α-terpineol, and linalool have been demonstrated to contain strong anti-diabetic effects via modulating various signal transduction pathways linked to glucose metabolism. Additionally, in diabetes-related animal models, they can also considerably reduce the expression of TNF-α, IL-1β, IL-4, IL-6, iNOS, and COX-2. The main signaling molecules regulated by these compounds include AMPK, GLUT4, Caspase-3, PPARγ, PPARα, NF-κB, p-IκBα, MyD88, MCP-1, SREBP-1c, AGEs, RAGE, VEGF, Nrf2/HO-1, and SIRT-1. They can also significantly inhibit the generation of TBARS and MDA, reduce oxidative stress, increase insulin levels, adiponectin, and glycoprotein enzymes, boost antioxidant enzymes like SOD, CAT, and GPx, as well as reduce glutathione and vital glycolytic enzymes. Besides, they can significantly lower the levels of liver enzymes and lipid profile markers. Moreover, most essential oil compounds are generally safe based on animal studies. In conclusion, dietary plant-derived essential oil compounds have potential anti-diabetic effects by influencing different signaling pathways and molecular targets linked to glucose metabolism, and should be safe and beneficial against diabetes and related complications.