Loss-of-function mutations in AGPAT2, encoding 1-acylglycerol-3-phosphate-O-acyltransferase 2 (AGPAT2), produce congenital generalised lipodystrophy (CGL). We screened the AGPAT2 gene in two siblings who presented with pseudoacromegaly, diabetes and severe dyslipidaemia and identified a novel mutation in AGPAT2 causing a single amino acid substitution, p.Cys48Arg. We subsequently investigated the molecular pathogenic mechanism linking both this mutation and the previously reported p.Leu228Pro mutation to clinical disease. Wild-type and mutant AGPAT2 were expressed in control and AGPAT2-deficient preadipocyte cell lines. mRNA and protein expression was determined, and the ability of each AGPAT2 species to rescue adipocyte differentiation in AGPAT2-deficient cells was assessed. Protein levels of both p.Cys48Arg and p.Leu228Pro AGPAT2 were significantly reduced compared with that of wild-type AGPAT2 despite equivalent mRNA levels. Stable expression of wild-type AGPAT2 partially rescued adipogenesis in AGPAT2 deficient preadipocytes, whereas stable expression of p.Cys48Arg or p.Leu228Pro AGPAT2 did not. In conclusion, unusually severe dyslipidaemia and pseudoacromegaloid overgrowth in patients with diabetes should alert physicians to the possibility of lipodystrophy. Both the previously unreported pathogenic p.Cys48Arg mutation in AGPAT2, and the known p.Leu228Pro mutation result in decreased AGPAT2 protein expression in developing adipocytes. It is most likely that the CGL seen in homozygous carriers of these mutations is largely accounted for by loss of protein expression.