Adiponectin is an adipose tissue specific protein that is decreased in subjects with obesity and type 2 diabetes. The objective of the present study was to examine whether variants in the regulatory regions of the adiponectin gene contribute to type 2 diabetes in Asian Indians. The study comprised of 2,000 normal glucose tolerant (NGT) and 2,000 type 2 diabetic, unrelated subjects randomly selected from the Chennai Urban Rural Epidemiology Study (CURES), in southern India. Fasting serum adiponectin levels were measured by radioimmunoassay. We identified two proximal promoter SNPs (-11377C-->G and -11282T-->C), one intronic SNP (+10211T-->G) and one exonic SNP (+45T-->G) by SSCP and direct sequencing in a pilot study (n = 500). The +10211T-->G SNP alone was genotyped using PCR-RFLP in 4,000 study subjects. Logistic regression analysis revealed that subjects with TG genotype of +10211T-->G had significantly higher risk for diabetes compared to TT genotype [Odds ratio 1.28; 95% Confidence Interval (CI) 1.07-1.54; P = 0.008]. However, no association with diabetes was observed with GG genotype (P = 0.22). Stratification of the study subjects based on BMI showed that the odds ratio for obesity for the TG genotype was 1.53 (95%CI 1.3-1.8; P < 10(-7)) and that for GG genotype, 2.10 (95% CI 1.3-3.3; P = 0.002). Among NGT subjects, the mean serum adiponectin levels were significantly lower among the GG (P = 0.007) and TG (P = 0.001) genotypes compared to TT genotype. Among Asian Indians there is an association of +10211T-->G polymorphism in the first intron of the adiponectin gene with type 2 diabetes, obesity and hypoadiponectinemia.