Visceral obesity is more common in the Arab population and more closely related to morbidity, including diabetes and related cardiovascular diseases (CVD). Possible mechanisms that link visceral fat/obesity to diabetes and CVD complications include inflammation and increased oxidative stress; however, few data are available from the Arab population. Our aim was to determine whether increased adiposity in obese diabetic United Arab Emirates citizens is associated with sub-clinical inflammation and/or increased oxidative stress. A hundred diabetic patients who were part of a randomized controlled trial of nutritional supplements had their baseline characteristics assessed from anthropometric and clinical data following informed written consent. We used WHO figures to classify general and central obesity. Fasting blood samples were collected for the measurement of antioxidants and markers of oxidative damage and inflammation. We found that increased adiposity measured by both body mass index and waist circumference was associated with increased C-reactive protein (CRP) and decreased vitamin C after adjusting for age, duration and treatment of diabetes (p < 0.05). Although there is a clear trend of increased inflammatory markers, notably CRP, and decreased antioxidants with increased BMI and waist circumference in both men and women, the results are statistically significant for women only. CRP were also inversely associated with HDL. Overall, we found that BMI underestimates the rates of obesity compared to waist circumference and that increased adiposity is associated with increased inflammation and decreased HDL and antioxidant status.