Serum cholesterol-binding reserve (SCBR), the capacity of a serum sample to solubilize additional cholesterol in excess of its cholesterol content, was measured in 43 white male patients with maturity-onset diabetes in the age range of 35--59 years who were under treatment with insulin. The values were compared with those of 194 nondiabetic controls of the same race, sex, and age range. The mean +/- S.D. of SCBR of patients (71.9 +/- 29.3 mg./dl.) was lower than that of controls (88.9 +/- 30.9 mg./dl.) (p less than 0.001). Age in the range of 35 to 59 years had no correlation with SCBR in either patients or controls. SCBR was positively correlated with serum levels of cholesterol (SC) and triglycerides (TG) in both patients and controls. After adjustment for SC and TG, the difference in SCBR between patients and controls persisted (p less than 0.001). In 15 of 20 (75 per cent) patient-control pairs matched for SC and TG to within 5 per cent, the patient had lower SCBR (paired t-test, p less than 0.002). In 16 patients without elevation of serum lipid levels (SC below 250 and TG below 150 mg./dl.), the mean +/- S.D. of SCBR (59.1 +/- 17.7 mg./dl.) was lower than that of 49 controls having serum lipids in the same range (77.4 +/- 31.7 mg./dl.) (p less than 0.03). These results indicate an association of decreased SCBR with diabetes and are consistent with the hypothesis that low SCBR is associated with accelerated atherosclerosis and enhanced risk for coronary heart disease.