Objectives To test the hypothesis that abnormal corpus callosum (CC) induced by diabetes may impair inter-hemispheric sensorimotor functional connectivity (FC) that is associated with poor clinical outcome after stroke. Methods Forty-five patients with acute ischaemic stroke in the middle cerebral artery territory and 14 normal controls participated in the study. CC was divided into five subregions on three-dimensional T1-weighted image. The microstructural integrity of each subregion of CC was analysed by DTI and the inter-hemispheric FCs in primary motor cortex (M1-M1 FC) and primary sensory cortex (S1-S1 FC) were examined by resting-state functional magnetic resonance imaging. Results Diabetic patients (n = 26) had significantly lower fractional anisotropy (FA) in the isthmus of CC (CCisthmus) when compared with non-diabetic patients (n = 19) and normal controls (p < 0.0001). In addition, diabetic patients had the lowest M1-M1 FC (p = 0.015) and S1-S1 FC (p = 0.001). In diabetic patients, reduced FA of CCisthmus correlated with decreased M1-M1 FC (r = 0.549, p = 0.004) and S1-S1 FC (r = 0.507, p = 0.008). Decreased M1-M1 FC was independently associated with poor outcome after stroke in patients with diabetes (odds ratio = 0.448, p = 0.017). Conclusions CC degeneration induced by diabetes impairs sensorimotor connectivity and dysfunction of motor connectivity can contribute to poor recovery after stroke in patients with diabetes.