OBJECTIVE - Although low HDL cholesterol (HDL-C) is an established risk factor for atherosclerosis, data on HDL-C and the risk ofmicrovascular disease are limited.We tested the association between HDL-C and microvascular disease in a cohort of patients with type 2 diabetes. RESEARCH DESIGN AND METHODS - A total of 11,140 patients with type 2 diabetes and at least one additional vascular risk factor were followed a median of 5 years. Cox proportional hazardsmodelswere used to assess the association between baselineHDL-C and the development of new or worsening microvascular disease, defined prospectively as a composite of renal and retinal events. RESULTS - The mean baseline HDL-C level was 1.3 mmol/L (SD 0.45mmol/L [range 0.1-4.0]). During follow-up, 32% of patients developed new or worsening microvascular disease, with 28% experiencing a renal event and 6%a retinal event. Compared with patients in the highest third, those in the lowest third had a 17% higher risk of microvascular disease (adjusted hazard ratio 1.17 [95% CI 1.06-1.28], P = 0.001) after adjustment for potential confounders and regression dilution. Thiswas driven by a 19%higher risk of renal events (1.19 [1.08-1.32], P = 0.0005). There was no association between thirds of HDL-C and retinal events (1.01 [0.82-1.25], P = 0.9). CONCLUSIONS - In patients with type 2 diabetes, HDL-C level is an independent risk factor for the development of microvascular disease affecting the kidney but not the retina.