In an effort to provide internists and other primary care physicians with effective management strategies for diabetes care, the Clinical Efficacy Assessment Subcommittee (CEAS) of the American College of Physicians (ACP) decided to develop guidelines on the management of dyslipidemia, particularly hypercholesterolemia, in people with type 2 diabetes mellitus. The CEAS commissioned a systematic review of the currently available evidence on the management of lipids in type 2 diabetes mellitus. The evidence review is presented in a background paper in this issue. On the basis of this systematic review, the CEAS developed recommendations that the ACP Board of Regents then approved as policy. The target audience for this guideline is all clinicians who care for patients with type 2 diabetes. The target patient population is all persons with type 2 diabetes, including those who already have some form of microvascular complication and, of particular importance, premenopausal women. The recommendations are as follows. RECOMMENDATION 1: Lipid-lowering therapy should be used for secondary prevention of cardiovascular mortality and morbidity for all patients (both men and women) with known coronary artery disease and type 2 diabetes. RECOMMENDATION 2: Statins should be used for primary prevention against macrovascular complications in patients (both men and women) with type 2 diabetes and other cardiovascular risk factors. RECOMMENDATION 3: Once lipid-lowering therapy is initiated, patients with type 2 diabetes mellitus should be taking at least moderate doses of a statin. RECOMMENDATION 4: For those patients with type 2 diabetes who are taking statins, routine monitoring of liver function tests or muscle enzymes is not recommended except in specific circumstances.