Atherosclerosis in type 2 diabetic patients has been linked to increased oxidative stress. Glutathione peroxidase-1 (GPx-1) plays an important role in the antioxidant defense of the vascular wall. To assess the association between variants in the GPx-1 gene and atherosclerosis, we screened the gene in 184 Japanese type 2 diabetic patients and identified four polymorphisms (−602A/G, +2C/T, Ala⁵/Ala⁶, and Pro198Leu). Among these polymorphisms, −602G, +2T, Ala⁶, and 198Leu were in strong linkage disequilibrium with each other. The patients were divided into two groups on the basis of the codon 198 polymorphism, Pro/Pro (n = 151) and Pro/Leu (n = 33), to analyze clinical characteristics. The mean intima-media thickness (IMT) of common carotid arteries (P = 0.0028) and the prevalence of cardiovascular disease (P = 0.035) and peripheral vascular disease (P = 0.027) were significantly higher in the Pro/Leu group than in the Pro/Pro group. In vitro functional analyses indicated that the combination of polymorphisms (Ala⁶/198Leu) of the GPx-1 gene had a 40% decrease in enzyme activity, and the combination of polymorphisms (−602G/+2T) had a 25% decrease in transcriptional activity. These results suggest that functional variants in the GPx-1 gene are associated with increased IMT of carotid arteries and risk of cardiovascular and peripheral vascular diseases in type 2 diabetic patients.