The current study was conducted to examine the importance of changes in adipose tissue distribution and other closely related characteristics that contribute to the improvements in metabolic fitness in response to weight loss in type 2 diabetes. The study cohort included patients with type 2 diabetes who were assessed after 1year on the intervention weight loss program of the Look AHEAD trial. The intervention led to improved levels of peripheral insulin sensitivity, reduced fasting glucose and free fatty acid (FFA) levels as well as to significant weight and fat loss including changes in adipose tissue distribution, and decrease in hepatic fat. Weight loss and overall fat mass reduction better predicted the improvement in peripheral insulin sensitivity compared to changes in adipose tissue distribution, with the exception of the decrease in hepatic fat. The changes in intra-abdominal (visceral) adipose tissue and hepatic fat were associated with improvement in fasting glucose independent of changes in overall adipose tissue mass. However, only the changes in hepatic fat were related to the changes in fasting glucose, after adjusting for the change in insulin sensitivity. It was also reported that changes in insulin-suppressed FFAs were linked to the change in hepatic fat. Thus, these findings suggest that changes in overall fat mass and hepatic fat better predicted the metabolic improvements induced by a lifestyle modification program.