No, hydrochlorothiazide does not cause diabetes. If you are already heading towards diabetes it may be the proverbial straw that broke the camel’s back. However it and many other medications that potentially raise blood sugar levels have little to no impact on the majority of people taking those medications.
Present data suggests that if you are pre-diabetic or diabetic type 1 or type 2, to be careful and work with your doctors due to the possibility of higher levels of blood sugars while on those medications.
Type 1 diabetes, is an autoimmune disorder, caused by heredity that destroys the Beta cells that are found in the islets of Langerhans within the pancreas.
With Type 1 diabetes antibodies that are produced in white blood cells are hard wired to attack beta cells as though they were a pathogen and destroy the beta cells needed to produce insulin.
Type 2 diabetes is not an autoimmune disorder. Type 2 occurs when the cells become resistant to insulin produced by the pancreas, causing an increase of sugar in the blood stream or the pancreas simply can't make enough insulin.
With Type 2 there are various causes: heredity, obesity, inactivity, poor nutrition and many other factors or a combination of those factors may cause the onset of type 2 diabetes.
Regardless hydrochlorothiazide maybe one of many factors that lead to diabetes but it alone will not cause type 2 diabetes.