South Asians have a higher risk for cardiovascular disease (CVD) that remains largely unexplained. We hypothesized that the increased CVD risk in South Asians compared to Europeans is mediated through higher levels of visceral adipose tissue (VAT) in South Asians compared to total body fat and subcutaneous abdominal adipose tissue (SAT). South Asians (207) and Europeans (201) underwent assessment for demographics, body fat, and risk factors. Linear regression models were created by sex for each risk factor to explore mediation effects of total body fat, SAT, and VAT adjusted for age, income, smoking, and BMI (menopausal status for women). Mediation was based on changes in the ethnicity β coefficient due to additional adjustment for our adipose variable of interest and the Sobel test for mediation. South Asians had worse lipid, glucose, insulin, and C-reactive protein (CRP) levels than Europeans after adjusting for confounders. Most of these differences remained even after further adjustment by either total body fat or SAT. In contrast, VAT attenuated the ethnic differences in risk factors by 16%-52%. After adjusting for VAT, there were no longer ethnic differences in total cholesterol (TC), LDL-C, TC/HDL-C, glucose, and diastolic blood pressure (BP) in men, and in HDL-C, triglycerides (TG), TC/HDL-C, and homeostasis model (HOMA) in women, and VAT was a significant mediator for these risk factors. Higher levels of risk factors for CVD in South Asians are predominantly because of the unique phenotype of South Asians having greater VAT than Europeans even at the same BMI.