We prospectively evaluated to what extent pre-existing coronary artery disease (CAD) accounts for the increased vascular event risk of patients with type 2 diabetes (T2DM).Vascular events were recorded over 8years in 750 consecutive patients whose baseline CAD state was verified angiographically.The baseline prevalence of CAD (87.8% vs. 80.4%; p=0.029) and of significant coronary stenoses ≥50% (69.5% vs. 58.4%; p=0.010) as well as the extent of CAD, i.e. the number of significant coronary stenoses (1.7±1.6 vs. 1.4±1.5; p=0.014) was higher in patients with T2DM (n=164) than in non-diabetic subjects. During follow-up, T2DM predicted vascular events (n=257) independently from the presence and extent of baseline CAD (HR 1.36 [1.03–1.81]; p=0.032); conversely, the presence and extent of baseline CAD predicted vascular events independently from T2DM (HRs 3.29 [1.93–5.64]; p<0.001 and 1.37 [1.23–1.53]; p<0.001, respectively). The relative risk increase conferred by T2DM was not significantly modulated by the presence of baseline CAD (p interaction =0.415). However, in absolute terms the risk increase conferred by T2DM was driven by an extremely high 53.5% event rate of patients with both T2DM and significant CAD at baseline; individuals with T2DM but without significant baseline CAD showed a significantly lower event rate (22.0%; p<0.001).T2DM and angiographically visualized coronary atherosclerosis are mutually independent predictors of vascular events. The overall risk increase conferred by T2DM is driven by accelerated progression of pre-existing atherosclerosis to clinical cardiovascular events; vascular risk is much lower in diabetic patients without pre-existing significant CAD.