Type 2 diabetes is a common disorder with high risk of macrovascular and microvascular complications. These complications are largely driven by hyperglycaemia, dyslipidaemia and hypertension, for which aggressive treatment is thus warranted. Achieving and maintaining control of all three risk factors is especially difficult, however, and new therapeutic approaches could be useful. Bile acids have a well-established and important role in cholesterol homeostasis. Normally, their levels are maintained primarily by ileal reabsorption and enterohepatic recycling. Bile acid sequestrants bind bile acids in the intestine, reduce this recycling and deplete the bile acid pool, thereby stimulating use of hepatic cholesterol for bile acid synthesis, which leads to accelerated removal of LDL from the plasma and a decrease in LDL-cholesterol levels. Interestingly, recent evidence suggests that bile acid sequestrants can lower glucose levels to a clinically meaningful degree. This review presents this evidence and the possible mechanisms by which these glucose-lowering effects occur and discusses the apparently unique ability of bile acid sequestrants among lipid-lowering agents to significantly improve two cardiovascular risk factors, hyperglycaemia and dyslipidaemia. There is renewed interest in the use of bile acid sequestrants in individuals with type 2 diabetes, most of whom would benefit from additional reductions in both LDL-cholesterol and glycaemia.