Transcription factor 7-like 2 (TCF7L2) regulates genes involved in cell proliferation and differentiation. The TCF7L2 gene is located on chromosome 10q25 in a region of replicated linkage to type 2 diabetes. Recently, a microsatellite marker in intron 3 (DG10S478) and five correlated single nucleotide polymorphisms (SNPs) were identified in Icelandic individuals that showed strong association with type 2 diabetes, which was replicated in Danish and European-American cohorts. We genotyped four of the SNPs (rs7901695, rs7903146, rs11196205, and rs12255372) in Amish subjects with type 2 diabetes (n = 137), impaired glucose tolerance (IGT; n = 139), and normal glucose tolerance (NGT; n = 342). We compared genotype frequencies in subjects with type 2 diabetes with those with NGT and found marginal association for rs7901695 (P = 0.05; odds ratio [OR] 1.51); comparison between NGT control subjects and the combined type 2 diabetes/IGT case group showed strong association with rs7901695 and rs7903146 (P = 0.008–0.01; OR 1.53–1.57) and marginal association with rs11196205 and rs12255372 (P = 0.07 and P = 0.04, respectively). In an expanded set of 698 Amish subjects without diabetes, we found no association with insulin and glucose levels during a 3-h oral glucose tolerance test. We also genotyped these SNPs in nondiabetic, non-Amish subjects (n = 48), in whom intravenous glucose tolerance tests were performed, and found an association between rs7901695 and rs7903146 and insulin sensitivity (P = 0.003 and P = 0.005, respectively) and disposition index (P = 0.04 and P = 0.007, respectively). These data provide replicating evidence that variants in TCF7L2 increase the risk for type 2 diabetes and novel evidence that the variants likely influence both insulin secretion and insulin sensitivity.