The risk of coronary heart disease and atherosclerosis is increased in both Type 2 and Type I diabetes mellitus. The dyslipidaemia of Type 2 diabetes consists of hypertriglyceridaemia and low levels of high-density lipoprotein (HDL) cholesterol. In Type I diabetes, hypertriglyceridaemia is also present, but when glycaemic control is good, HDL cholesterol levels may be normal or even increased. In both types of diabetes, nephropathy is associated with an exacerbation of hypertriglyceridaemia, a decline in HDL cholesterol level and an increase in serum cholesterol. In the absence of nephropathy, serum cholesterol levels are typically similar to those of the background non-diabetic population. The risk of coronary heart disease (CHD) associated with serum cholesterol is, however, considerably higher in diabetics than in non-diabetic people, and is much less in diabetic populations living in countries where the average cholesterol level is low, even when hypertension is present. Currently, the strongest evidence that lipid-lowering drug therapy will decrease the risk of CHD, particularly in secondary prevention, comes from trials of statins that lower cholesterol. There is growing experimental and observational evidence that hypertriglyceridaemia, because of its effects on cholesteryl ester transfer, leading to the formation of a small low-density lipoprotein susceptible to oxidation, compounds the risk of serum cholesterol in diabetes. Both fibrates and statins can decrease this cholesteryl ester transfer. Further studies of fibrates with clinical end-points should clarify their role in the prevention of CHD. In the meantime, statins should be part of routine diabetic clinical practice, fibrates having a more limited role when hypertriglyceridaemia is extreme.