Type 2 diabetes (T2D) is characterized by chronic hyperglycaemia with disturbances of carbohydrate, fat and lipid metabolism resulting from defects in insulin secretion, action or both. Cardiovascular morbidity and mortality is high among T2D subjects and of all the complications of T2D individuals, Coronary artery disease (CAD) is the most common and life threatening. It has been found that risk for CAD is high among diabetic subjects by the factor of 2 to 4 as compared to non diabetic subjects. T2D has been associated with endothelial dysfunction as it increases the inflammation and insulin resistance resulting in the increase of oxidized low density lipoprotein, endothelin 1, angiotensin II, oxidative stress and decreasing the action of nitric oxide and insulin or growth factors in endothelial cells. The candidate genes for T2D are potential candidate genes for CAD also because of the overlap of the various metabolic and hormonal derangements in both the conditions. Among these, genes like TCF7L2, ACE, PPAR gamma, IRS1, Adiponectin and TNF alpha have emerged as main candidate genes linking both the conditions. In the GWAS studies a common locus on 9p21.3 (ANRIL) has been found for both the diseases. In spite of a shared pathophysiology between both the conditions reports for their genetic association are scarce. Thus there is a strong need for further studies and development of a strategy for the prevention of CAD long before its onset in T2D patients. In this review we focused on the various pathophysiological links (insulin resistance, hyperglycaemia, inflammation, and defect in fibrinolytic and coagulation factors, dyslipidaemia) and genetic links between T2D and CAD.