Background: Statins, which lower circulating LDL-C by inhibiting HMG CoA reductase, are a first-line treatment for prevention of cardiovascular disease. Recent clinical and genetic studies have shown that statins modestly increase the risk of incident type 2 diabetes (T2DM). The biological mechanisms of statin-induced T2DM remain unknown. It also remains unclear if patients with risk factors for diabetes are at higher proportional risk of statin-induced T2DM than those without risk factors, as some studies have claimed. Evidence for the effect of another LDL-C lowering drug, ezetimibe, on T2DM is insufficient, but if related to LDL-C, it may also impact on T2DM risk. Methods: HMGCR and NPC1L1 genetic risk scores (GRS) were used as statin and ezetimibe genetic proxies, respectively. The principles of a drug-target Mendelian randomisation were used to examine the effect of 1 SD (~1 mmol/L) lower genetically predicted LDL-C on T2DM, glycaemic traits and anthropometric measures in approximately 330,000 white British participants in UK Biobank. The heterogeneity of HMGCR GRS associations with T2DM and diabetes-related traits was also assessed in subgroup analyses among participants with varying susceptibilities (both genetic and clinical) to T2DM. Results: 1 SD lower HMGCR-predicted LDL-C was associated with a 26% (95% CI 8%, 47%) higher risk of total T2DM, higher HbA1c (0.05 SD 95% CI 0.02, 0.08) and higher levels of adiposity. There was no evidence to support the hypothesis that the proportional effect of HMGCR GRS on T2DM in participants was greater in individuals with T2DM risk factors, and instead some subgroup analyses suggested a trend towards lower proportional risk of HMGCR-associated T2DM in those at higher risk of T2DM. NPC1L1 GRS showed a similar but non-significant association with T2DM per 1 SD lower genetically predicted LDL-C to that observed for HMGCR and a strong association with HbA1c (0.15 SD, 95% CI 0.09, 0.22) per 1 SD lower NPC1L1-predicted LDL-C. Conclusions: An HMGCR GRS associated with lower LDL-C levels was associated with higher T2DM, HbA1c levels and measures of adiposity. Although most cases of T2DM occurred in participants at elevated risk of T2DM, there was no excess proportional risk of T2DM in this subgroup compared to participants at lower risk. The association of NPC1L1 with T2DM was underpowered, but directionally consistent with the associations observed for HMGCR, and the NPC1L1 GRS was also associated with higher HbA1c levels but not with higher levels of adiposity.