Recently, the transcription factor-7-like 2 (TCF7L2) gene has been identified as the most important type 2 diabetes mellitus (T2DM) susceptibility gene. Common intronic polymorphisms in this gene have been found to be strongly associated with T2DM susceptibility showing marked reproducibility in multiple populations. The purpose of this study was to confirm the reported association of six TCF7L2 variants in a Khatri Sikh diabetic sample from North India. We genotyped six-associated SNPs in a case-control sample consisting of 556 T2DM cases and 537 controls. We also examined the impact of these variants on body mass index (BMI), waist to hip ratio (WHR), fasting insulin, and glucose and lipid levels. We report replication of association of four of the six SNPs with T2DM in this Khatri Sikh sample [rs7903146, (p = 0.010); rs11196205, (p = 0.011); rs10885409, (p = 0.002) and rs4918789, (p = 0.029)], under a dominant model conferring odds ratios (ORs) of 1.39, 1.44, 1.57 and 1.36, respectively. Haplotype analysis provided further evidence of association by showing a significant difference between cases and controls as revealed by the global omnibus test (chi(2)= 19.36; p = 0.0036). Multiple linear regression analysis also revealed the risk allele carriers of three of four significant SNPs (rs7903146, rs11196205, rs10885409) to be significantly associated with increased fasting total cholesterol (p value = 0.019, 0.025, 0.006) and LDL cholesterol levels (p value = 0.021, 0.018, 0.005), respectively. Our findings confirm that the TCF7L2 gene is a major risk factor for development of T2DM in Khatri Sikhs. It also provides new information about the significant impact of TCF7L2 gene variants on plasma cholesterol levels that appear to be independent of BMI.