Background Lipid accumulation product (LAP) is a novel biomarker of central lipid accumulation related to risk of diabetes and cardiovascular disease. In this study, we assessed the association of LAP with glucose homeostasis, lipid and lipid peroxidation, and subclinical systemic inflammation in diabetic patients. Methods Thirty-nine male and 47 female type 2 diabetic patients were assessed for anthropometrics and biochemical measurements. LAP was calculated as [waist circumference (cm)-65]×[triglycerides (mmol/L)] in men, and [waist circumference (cm)-58]×[triglycerides (mmol/L)] in women. Associations of LAP with fasting glucose, insulin, insulin resistance index, lipid and lipoprotein levels, malondialdehyde, and high-sensitive C-reactive protein (hs-CRP) were assessed. Results Mean age and LAP index were 53.6±9.6 and 51.9±31.2 years, respectively. After adjustments for age, sex and body mass index status, a significant positive correlation was observed between LAP index and fasting glucose ( r =0.39, P <0.001), and homeostasis model assessment of insulin resistance ( r =0.31, P <0.05). After additional adjustment for fasting glucose levels, antidiabetic and antilipidemic drugs, the LAP index was also correlated to total cholesterol ( r =0.45, P <0.001), high density lipoprotein cholesterol (HDL-C) levels ( r =-0.29, P <0.05), triglycerides to HDL-C ratio ( r =0.89, P <0.001), malondialdehyde ( r =0.65, P <0.001), and hs-CRP levels ( r =0.27, P <0.05). Conclusion Higher central lipid accumulation in diabetic patients was related to higher insulin resistance, oxidative stress and systemic inflammation.