The onset of type 2 diabetes (T2DM) is preceded by obesity, insulin resistance, and impaired β-cell function. Uncoupling protein-2 (UCP2) is a widely expressed inner mitochondrial membrane protein. Common polymorphisms of the UCP2 gene have been implicated in diabetes, in obesity, and with changes in UCP2 mRNA levels. We tested the hypothesis that common UCP2 variants influence T2DM susceptibility in four parallel studies of separate populations. We typed the -866 promoter (G/A) variant, a nonsynonymous (Ala55Val or A55V) single-nucleotide polymorphism in exon 4, and a 45-nt insertion in the 3′-untranslated (3′UTR) region. Study populations included a case-control population study, a family-based association study, and a metabolic study of individuals who had been characterized for insulin sensitivity and secretion. To evaluate UCP2 mRNA levels, we examined a fourth population of subjects, who had undergone subcutaneous fat biopsy. All three variants showed a trend to an association with T2DM (P = 0.05 to 0.07) in the population but not the family-based association study. The 3′ insertion/deletion (3′UTR I/D) variant was associated with body mass index (BMI, P = 0.035) among nondiabetic family members. Haplotype combinations were significantly associated with BMI (P = 0.028), triglyceride levels (P = 0.026), and fasting insulin (P = 0.029); highest values for the three traits were observed in individuals with the heterozygous combination GVI/AVD. In the metabolic study, all three variants were associated with an index of β-cell compensation for insulin sensitivity (disposition index), particularly in interaction with family membership (P < 0.000001). Individuals homozygous for the -866 A allele had decreased adipose mRNA levels relative to GG homozygous individuals (P = 0.009), but the 3′UTR I/D variant had no impact on mRNA levels. We confirm modest effects of UCP2 variants on BMI and T2DM and show significant effects on insulin secretion in interaction with family-specific factors. However, the associated allele and the effects on gene expression are opposite to those reported previously.