A low plasma level of HDL cholesterol is an atherosclerotic risk factor; however, emerging evidence suggests that low HDL levels might also contribute to the pathophysiology of type 2 diabetes mellitus (T2DM) through direct effects on plasma glucose. In the past decade, animal and clinical studies have uncovered a previously undescribed spectrum of HDL actions, indicating that HDL may control glucose homeostasis through mechanisms including insulin secretion, direct glucose uptake by muscle via the AMP-activated protein kinase, and possibly enhanced insulin sensitivity. These effects are mediated by multiple cell types via mechanisms including preservation of cell function through cellular lipid removal and also via direct signaling events. We suggest a paradigm shift from HDL being a bystander to being an active player in diabetic pathophysiology, which raises the possibility that HDL elevation could be a novel therapeutic avenue for T2DM. The entry of HDL-raising agents of the cholesteryl ester transfer protein (CETP) inhibitor class into late-phase clinical trials creates potential for rapid clinical translation. This Review will discuss the emerging evidence for a role of HDL-mediated glucose regulation in the pathophysiology of T2DM, and will also outline the therapeutic potential for HDL elevation for the prevention and management of T2DM.