Background: Genome-wide association studies in Japanese populations recently identified common variants in the KCNQ1 gene to be associated with type 2 diabetes. We examined the association of these variants within KCNQ1 with type 2 diabetes in a Dutch population, investigated their effects on insulin secretion and metabolic traits and on the risk of developing complications in type 2 diabetes patients. Methodology: The KCNQ1 variants rs151290, rs2237892, and rs2237895 were genotyped in a total of 4620 type 2 diabetes patients and 5285 healthy controls from the Netherlands. Data on macrovascular complications, nephropathy and retinopathy were available in a subset of diabetic patients. Association between genotype and insulin secretion/action was assessed in the additional sample of 335 individuals who underwent a hyperglycaemic clamp. Principal Findings: We found that all the genotyped KCNQ1 variants were significantly associated with type 2 diabetes in our Dutch population, and the association of rs151290 was the strongest (OR 1.20, 95% CI 1.07-1.35, p = 0.002). The risk C-allele of rs151290 was nominally associated with reduced first-phase glucose-stimulated insulin secretion, while the non-risk T-allele of rs2237892 was significantly correlated with increased second-phase glucose-stimulated insulin secretion (p = 0.025 and 0.0016, respectively). In addition, the risk C-allele of rs2237892 was associated with higher LDL and total cholesterol levels (p = 0.015 and 0.003, respectively). We found no evidence for an association of KCNQ1 with diabetic complications. Conclusions: Common variants in the KCNQ1 gene are associated with type 2 diabetes in a Dutch population, which can be explained at least in part by an effect on insulin secretion. Furthermore, our data suggest that KCNQ1 is also associated with lipid metabolism. © 2012 van Vliet-Ostaptchouk et al.