Patients in diabetes treatment sometimes struggle with psychosocial problems that may interact with their abilities to manage diabetes. Health care providers may feel frustrated, ineffective, and helpless because it is difficult to form a working alliance with these challenging patients. This chapter defines the working alliance and presents it as an essential ingredient of patient-centered diabetes treatment and as a salient factor in counteracting challenging patient encounters. It also reviews the literature on fear-based psychosocial problems in relation to hypoglycemia, hyperglycemia, or weight gain as well as co-morbid conditions of diabetes, depression, and other chronic illnesses. This chapter also discusses the ways these conditions contribute to challenging patient encounters and presents clinical vignettes to illustrate the dynamics and complexities of working with these psychosocial difficulties. Finally, suggestions are offered on ways to build a working alliance with patients in challenging patient encounters.