Diabetes mellitus (DM), a prevalent metabolic disorder, has significant global health implications. The advent of machine learning (ML) has revolutionized the ability to predict and manage diabetes early, offering new avenues to mitigate its impact. This systematic review examined 53 articles on ML applications for diabetes prediction, focusing on datasets, algorithms, training methods, and evaluation metrics. Various datasets, such as the Singapore National Diabetic Retinopathy Screening Program, REPLACE-BG, National Health and Nutrition Examination Survey (NHANES), and Pima Indians Diabetes Database (PIDD), have been explored, highlighting their unique features and challenges, such as class imbalance. This review assesses the performance of various ML algorithms, such as Convolutional Neural Networks (CNN), Support Vector Machines (SVM), Logistic Regression, and XGBoost, for the prediction of diabetes outcomes from multiple datasets. In addition, it explores explainable AI (XAI) methods such as Grad-CAM, SHAP, and LIME, which improve the transparency and clinical interpretability of AI models in assessing diabetes risk and detecting diabetic retinopathy. Techniques such as cross-validation, data augmentation, and feature selection are discussed in terms of their influence on the versatility and robustness of the model. Some evaluation techniques involving k-fold cross-validation, external validation, and performance indicators such as accuracy, Area Under Curve, sensitivity, and specificity are presented. The findings highlight the usefulness of ML in addressing the challenges of diabetes prediction, the value of sourcing different data types, the need to make models explainable, and the need to keep models clinically relevant. This study highlights significant implications for healthcare professionals, policymakers, technology developers, patients, and researchers, advocating interdisciplinary collaboration and ethical considerations when implementing ML-based diabetes prediction models. By consolidating existing knowledge, this SLR outlines future research directions aimed at improving diagnostic accuracy, patient care, and healthcare efficiency through advanced ML applications. This comprehensive review contributes to the ongoing efforts to utilize artificial intelligence technology for a better prediction of diabetes, ultimately aiming to reduce the global burden of this widespread disease.