Observationally, low levels of HDL cholesterol are consistently associated with increased risk of type 2 diabetes. Therefore, plasma HDL cholesterol increasing has been suggested as a novel therapeutic option to reduce the risk of type 2 diabetes. Whether levels of HDL cholesterol are causally associated with type 2 diabetes is unknown. In a prospective study of the general population (n = 47,627), we tested whether HDL cholesterol-related genetic variants were associated with low HDL cholesterol levels and, in turn, with an increased risk of type 2 diabetes. HDL cholesterol-decreasing gene scores and allele numbers associated with up to -13 and -20% reductions in HDL cholesterol levels. The corresponding theoretically predicted hazard ratios for type 2 diabetes were 1.44 (95% CI 1.38-1.52) and 1.77 (1.61-1.95), whereas the genetic estimates were nonsignificant. Genetic risk ratios for type 2 diabetes for a 0.2 mmol/L reduction in HDL cholesterol were 0.91 (0.75-1.09) and 0.93 (0.78-1.11) for HDL cholesterol-decreasing gene scores and allele numbers, respectively, compared with the corresponding observational hazard ratio of 1.37 (1.32-1.42). In conclusion, genetically reduced HDL cholesterol does not associate with increased risk of type 2 diabetes, suggesting that the corresponding observational association is due to confounding and/or reverse causation.