<p>Most machine learning models for diabetes prediction rely on small, homogeneous datasets and fixed thresholds, producing binary outputs with limited clinical utility. These approaches lack generalizability, probabilistic awareness, and interpretability, which are essential for real-world healthcare adoption. We present Diabetes Risk via Explainable AI Modeling (D.R.E.A.M.), a framework for Type 2 diabetes mellitus (T2DM) risk prediction that delivers continuous, calibrated probabilities with transparent explanations. D.R.E.A.M. integrates two complementary datasets (PIMA and BRFSS 2015) after excluding gestational diabetes cases, applies clinically guided feature engineering and class balancing, and trains ensemble models (Random Forest, XGBoost, LightGBM). Decision thresholds are optimized using precision–recall curve analysis rather than default cutoffs, enabling clinically meaningful stratification. Model interpretability is achieved through SHapley Additive exPlanations (SHAP), providing both global and patient-level insights. All models achieved Area Under the Curves above 0.83 and F1-scores of 0.78, with Random Forest offering the best balance of sensitivity (recall = 0.89 at an optimized threshold of 0.389) and interpretability. SHAP confirmed the contribution of both physiological and behavioral factors, including glucose, BMI, blood pressure, cholesterol, and physical activity. Accessible via a lightweight web interface, D.R.E.A.M. provides real-time, explainable risk scores to support personalized preventive strategies. In summary, D.R.E.A.M. advances beyond conventional post-hoc explainability by integrating calibrated probabilistic predictions, PRC-based thresholding, and direct clinician-facing deployment. This combination transforms it from a research prototype into a transparent and clinically actionable decision support system.</p>