Recently, common noncoding variants in the TCF7L2 gene were strongly associated with increased risk of type 2 diabetes in samples from Iceland, Denmark, and the U.S. We genotyped 13 single nucleotide polymorphisms (SNPs) across TCF7L2 in 8,310 individuals in family-based and case-control designs from Scandinavia, Poland, and the U.S. We convincingly confirmed the previous association of TCF7L2 SNPs with the risk of type 2 diabetes (rs7903146T odds ratio 1.40 [95% CI 1.30-1.50], P = 6.74 x 10(-20)). In nondiabetic individuals, the risk genotypes were associated with a substantial reduction in the insulinogenic index derived from an oral glucose tolerance test (risk allele homozygotes have half the insulin response to glucose of noncarriers, P = 0.003) but not with increased insulin resistance. These results suggest that TCF7L2 variants may act through insulin secretion to increase the risk of type 2 diabetes.