Mild hyperhomocysteinemia is a risk factor for many diseases, including cardiovascular disease. We determined the effects of insulin resistance and of type 2 diabetes on homocysteine (Hcy) metabolism using Zucker diabetic fatty rats (ZDF/Gmi fa/fa and ZDF/Gmi fa/?). Plasma total Hcy was reduced in ZDF fa/fa rats by 24% in the pre-diabetic insulin-resistant stage, while in the frank diabetic stage there was a 59% reduction. Hepatic activities of several enzymes that play a role in the removal of Hcy:cystathionine β-synthase (CBS), cystathionine γ-lyase, and betaine:Hcy methyltransferase (BHMT) were increased as was methionine adenosyltransferase. CBS and BHMT mRNA levels and the hepatic level of S-adenosylmethionine were also increased in the ZDF fa/fa rats. Studies with primary hepatocytes showed that Hcy export and the transsulfuration flux in cells from ZDF fa/fa rats were particularly sensitive to betaine. Interestingly, liver betaine concentration was found to be significantly lower in the ZDf fa/fa rats at both 5 and 11 weeks. These results emphasize the importance of betaine metabolism in determining plasma Hcy levels in type 2 diabetes.