Diabetes UK said it was vital the 2.3 million sufferers had top quality care.
The Department of Health in England said shocking variations in care and an unacceptable death toll were evident.
About a third of people in the UK affected do not realise they have the condition.
It means their bodies cannot use glucose properly. If they do not manage it, they can develop potentially fatal complications like heart or kidney failure.
The report, by the NHS Information Centre, compared information about people with diabetes in England with data from death records.
Barbara Young Diabetes UK Chief Executive.We will be holding the NHS to account wherever it fails to deliver high-quality diabetes care”
That includes basic health checks from doctors, and patients taking medication and keeping to a healthy diet.
For patients with Type 1, the risk of dying was 2.6 times higher than it was for the general population.
With Type 2, the risk was 1.6 times higher.
But in younger age groups, the risk was far greater. Women between the ages of 15 and 34 with diabetes were nine times more likely to die than other women of the same age.
Men in the same age group were four times more likely to die if they had the condition.
It is the first time there has been such a comprehensive assessment of the number of affected people dying.
The National Diabetes Information Service said the number of people with the condition was rising, so if nothing was done, the number of deaths would also increase.
"Many of these deaths could be prevented," said Dr Bob Young, diabetologist and spokesman for the National Diabetes Information Service.
"Doctors, nurses and the NHS working in partnership with people who have diabetes should be able to improve these grim statistics."
Diabetes UK described the figures as alarming.
"We know that half of people with Type 2 and more than two thirds of people with Type 1 diabetes are not receiving the care they need to stay healthy," said Barbara Young, Diabetes UK chief executive.
"It is imperative we take action now to stop even more lives being needlessly cut short.
"We will be holding the NHS to account wherever it fails to deliver high-quality care."
The Department of Health in England said the audit had revealed shocking variations in care, and an unacceptable death toll.
Care services Minister Paul Burstow said: "I expect the NHS to learn from the best. It's not rocket science - integrated health care can help people manage their diabetes, and stay well and out of hospital."