BACKGROUND: Means to reduce future risk for cardiovascular disease in subjects with type 2 diabetes are urgently needed. METHODS: Thirty-two patients with type 2 diabetes (age 59 ± 8 years) followed a Paleolithic diet for 12 weeks. Participants were randomized to either standard care exercise recommendations (PD) or 1-h supervised exercise sessions (aerobic exercise and resistance training) three times per week (PD-EX). RESULTS: For the within group analyses, fat mass decreased by 5.7 kg (IQR: -6.6, -4.1; $p$ < 0.001) in the PD group and by 6.7 kg (-8.2, -5.3; $p$ < 0.001) in the PD-EX group. Insulin sensitivity (HOMA-IR) improved by 45% in the PD ($p$ < 0.001) and PD-EX ($p$ < 0.001) groups. HbA1c decreased by 0.9% (-1.2, -0.6; $p$ < 0.001) in the PD group and 1.1% (-1.7, -0.7; $p$ < 0.01) in the PD-EX group. Leptin decreased by 62% ($p$ < 0.001) in the PD group and 42% ($p$ < 0.001) in the PD-EX group. Maximum oxygen uptake increased by 0.2 L/min (0.0, 0.3) in the PD-EX group, and remained unchanged in the PD group ($p$ < 0.01 for the difference between intervention groups). Male participants decreased lean mass by 2.6 kg (-3.6, -1.3) in the PD group and by 1.2 kg (-1.3, 1.0) in the PD-EX group ($p$ < 0.05 for the difference between intervention groups). CONCLUSIONS: A Paleolithic diet improves fat mass and metabolic balance including insulin sensitivity, glycemic control, and leptin in subjects with type 2 diabetes. Supervised exercise training may not enhance the effects on these outcomes, but preserves lean mass in men and increases cardiovascular fitness. Copyright © 2016 John Wiley & Sons, Ltd.