The gut microbiota has emerged as a central regulator of host metabolism, influencing numerous physiological processes that govern energy balance, immune function, and glucose homeostasis. A growing body of evidence links dysbiosis—disruptions in microbial composition and functionality—to the onset and progression of insulin resistance and type 2 diabetes (T2D). Changes in microbial diversity and the abundance of key bacterial taxa can influence the production of metabolites such as short-chain fatty acids (SCFAs), bile acids, and lipopolysaccharides (LPS), all of which play crucial roles in modulating inflammation, gut permeability, and insulin signaling. This review delves into the multifaceted relationship between gut microbiota and metabolic dysfunction, focusing on how microbial imbalances contribute to chronic low-grade inflammation, altered lipid metabolism, and impaired glucose uptake. Special emphasis is placed on the mechanisms involving SCFA production, dysregulated bile acid profiles, LPS-driven endotoxemia, and compromised intestinal barrier function. These disruptions collectively create an environment conducive to insulin resistance and β-cell dysfunction, the current and emerging microbiota-centered therapeutic strategies aimed at restoring gut eubiosis. Interventions such as probiotics, prebiotics, synbiotics, postbiotics, and fecal microbiota transplantation (FMT) are gaining traction for their potential to improve metabolic parameters and insulin sensitivity. By modulating the gut ecosystem, these therapies offer promising adjuncts to conventional diabetes management, the intricate gut–metabolism axis not only enhances our knowledge of T2D pathogenesis but also paves the way for innovative, microbiome-informed approaches to disease prevention and treatment.