OBJECTIVE: We examined associations of cardiovascular, metabolic, and body composition measures with exercise capacity using baseline data from 5,145 overweight and/or obese (BMI > or = 25.0 kg/m2) men and women with type 2 diabetes who were randomized participants for the Look AHEAD (Action for Health in Diabetes) clinical trial. RESEARCH DESIGN AND METHODS: Peak exercise capacity expressed as METs and estimated from treadmill speed and grade was measured during a graded exercise test designed to elicit a maximal effort. Other measures included waist circumference, BMI, type 2 diabetes duration, types of medication used, A1C, history of cardiovascular disease, metabolic syndrome, beta-blocker use, and race/ethnicity. RESULTS: Peak exercise capacity was higher for men (8.0 +/- 2.1 METs) than for women (6.7 +/- 1.7 METs) (P < 0.001). Exercise capacity also decreased across each decade of age (P < 0.001) and with increasing BMI and waist circumference levels in both sexes. Older age, increased waist circumference and BMI, a longer duration of diabetes, increased A1C, a history of cardiovascular disease, having metabolic syndrome, beta-blocker use, and being African American compared with being Caucasian were associated with a lower peak exercise capacity for both sexes. Hypertension and use of diabetes medications were associated with lower peak exercise capacity in women. CONCLUSIONS: Individuals with diabetes who are overweight or obese have impaired exercise capacity, which is primarily related to age, female sex, and race, as well as poor metabolic control, BMI, and central obesity.