Lipid abnormalities in type 2 diabetes are characterised by high triglyceride concentrations, low high density lipoprotein-cholesterol concentrations, and normal total and low density lipoprotein-cholesterol (LDL-c) concentrations. LDL particles, however, are small and dense. Epidemiological evidence for these lipid abnormalities, and for the associations between lipid abnormalities and the increased risk of cardiovascular disease in type 2 diabetes, are presented. Most, of the lipid abnormalities in type 2 diabetes can be explained by reduced action of insulin at the tissue level. The biochemical and metabolic mechanisms underlying the lipid abnormalities are discussed.