Just 30% of people know that diabetes raises the risk of blindness, according to the survey for the charity Diabetes UK.
The poll of 1,000 people by ICM Research also found that just 28% understood the raised risk of amputation from diabetes, while only 15% knew about the greater risk of MI.
A £2m awareness campaign from Diabetes UK will seek to change the view that the disease has only a mild impact on health.
Adverts will be placed in public places, on the radio and on digital media to raise awareness of diabetes risk factors, including being overweight, having a large waistline, having a close relative with the condition or being over 40.
The public will be encouraged to visit their GP, a pharmacy or a dedicated website to check their risk of developing the disease.
Barbara Young, chief executive of Diabetes UK, said: 'This survey makes it clear that most people do not understand the potential consequences of developing [diabetes] and I worry that until we finally lay to rest the myth that type 2 diabetes is a mild condition, it will continue to be seen as something that is not worth being concerned about.
'This is a misconception that is wrecking lives and is the reason that as a country we are sleepwalking towards a public health disaster of an almost unimaginable scale.'
Around 3.8m in the UK have diabetes and a 2012 report from the charity predicted cases of diabetes would rise to 5m by 2050.
The advertisement campaign will run from Monday until 6 October.