Background  Chinese Type 2 diabetic subjects are generally less obese than their Caucasian counterparts. We hypothesized that lean and obese Chinese Type 2 diabetic subjects have different metabolic and insulin secretory profiles. We compared the clinical features, C peptide and metabolic status between lean/normal weight and obese diabetic subjects. Study design  We conducted a cross‐sectional study on 521 consecutive diabetic subjects newly referred to a Diabetes Clinic in 1996. The subjects were categorized into underweight (< 18.5 kg/m2), normal weight (18.5–23 kg/m2) and overweight (≥ 23 kg/m2) according to the re‐defined WHO criterion for obesity in Asia Pacific Region. Metabolic and anthropometric parameters were compared between groups with different levels of obesity. Results  In this cohort, 5.8, 30.6 and 63.7% of subjects were underweight, normal weight and overweight, respectively, using the ‘Asian’ criteria. Of these 521 subjects, 20% had fasting C‐peptide less than 0.2 nmol/l, suggesting insulin deficiency. Fasting C‐peptide showed linear increasing trend (P < 0.001) while HbA1c showed decreasing trend (P = 0.001) with BMI after adjustment for duration of disease. There were more subjects in the underweight group who were treated with insulin (41.3% vs. 13.9 and 8.2%, P < 0.001). Although homeostasis model assessment was similar amongst the three groups, systolic (P = 0.006) and diastolic blood pressure (P < 0.001) and triglyceride (P < 0.001) showed increasing, while HDL‐C (P < 0.001) showed decreasing, trends across different BMI groups. The underweight patients had the lowest C‐peptide and highest HbA1c while overweight patients had the highest C‐peptide, blood pressure, triglyceride but lowest HbA1c levels. Conclusion  In Chinese Type 2 diabetic patients, lean subjects had predominant insulin deficiency and obese subjects had features of metabolic syndrome. Clinicians should have low threshold to initiate insulin therapy in lean Type 2 diabetic patients with suboptimal glycaemic control. In obese diabetic patients, aggressive control of multiple cardiovascular risks is of particular importance.