Diabetes is a global public health crisis, and the prevalence is increasing rapidly. Folate supplementation is proved to be effective in reducing the risk of diabetes or improving its symptoms. Methylenetetrahydrofolate reductase is an important enzyme involved in folate metabolism. The aim of this study is to examine whether polymorphisms in the MTHFR gene are associated with risk of type 2 diabetes mellitus (T2DM) and fasting total serum homocysteine (tHcy) levels. We genotyped nine tagging SNPs in the MTHFR gene in a case-control study, including 595 T2DM cases and 681 healthy controls in China. We found that C allele of rs9651118 had significant decreased risk of T2DM (adjusted odds ratio (OR) = 0.69, 95% confidence interval (CI): 0.55–0.87, P=0.002) compared with T allele. Haplotype analysis also showed that MTHFR CTCCGA haplotype (rs12121543-rs13306553-rs9651118-rs1801133-rs2274976-rs1801131) had significant reduced risk of T2DM (adjusted OR = 0.71, 95% CI: 0.58–0.87, P=0.001) compared with CTTTGA haplotype. Besides, the MTHFR rs1801133 was significantly associated with serum levels of tHcy in healthy controls (P=0.0002). These associations were still significant after Bonferroni corrections (P<0.0056). These findings suggest that variants in the MTHFR gene may influence the risk of T2DM and tHcy levels.