Individual risk of type 2 diabetes (T2D) is modified by perturbations to the mass, distribution and function of adipose tissue. To investigate the mechanisms underlying these associations, we explored the molecular, cellular and whole-body effects of T2D-associated alleles near KLF14. We show that KLF14 diabetes-risk alleles act in adipose tissue to reduce KLF14 expression and modulate, in trans, the expression of 385 genes. We demonstrate, in human cellular studies, that reduced KLF14 expression increases pre-adipocyte proliferation but disrupts lipogenesis, and in mice, that adipose tissue-specific deletion of Klf14 partially recapitulates the human phenotype of insulin resistance, dyslipidemia and T2D. We show that carriers of the KLF14 T2D risk allele shift body fat from gynoid stores to abdominal stores and display a marked increase in adipocyte cell size, and that these effects on fat distribution, and the T2D association, are female specific. The metabolic risk associated with variation at this imprinted locus depends on the sex both of the subject and of the parent from whom the risk allele derives.