We previously reported that pharmacological melatonin administration to type 2 diabetic rats reduces hyperinsulinemia and improves the altered fatty-acid metabolism. To determine whether melatonin deficiency exacerbates diabetes-associated conditions, we investigated the effect of pinealectomy (i.e. melatonin-deficiency) on plasma hormone levels and lipid metabolism in type 2 diabetic Otsuka Long-Evans Tokushima Fatty (OLETF) rats. We compared levels of insulin and leptin, and hepatic lipids in pinealectomized OLETF (PO) rats, sham-operated OLETF (SO) rats and sham-operated healthy Long-Evans Tokushima Otsuka (LETO) (SL) rats 16 and 30 wk after the operation. Plasma glucose and triglycerides were increased in SO and PO rats 30 wk after operation compared with age-matched SL rats. Pinealectomy caused an increase in free cholesterol among the plasma lipids, as compared with SO rats. Sixteen weeks after pinealectomy, typical hyperinsulinemia was observed in PO rats (3.47-fold increase, P < 0.01) as compared with SL rats, whereas at 30 wk, the plasma levels of insulin in PO and SO rats had decreased and there was no significant difference among the three groups. Hepatic triglycerides were increased (1.54-fold, P < 0.005) in PO rats, compared with SO rats. Hepatic acyl-CoA synthetase (ACS) activity was significantly augmented in PO rats at 30 wk (10%, P < 0.01 versus SO group), while microsomal triglyceride transfer protein (MTP) decreased (-27% versus SO, P < 0.05); thus, the increased ACS activity and decreased MTP might have a role in the accumulation of hepatic triglycerides in PO rats. In summary, pinealectomy causes severe hyperinsulinemia and accumulation of triglycerides in the liver, probably owing to the loss of the nocturnal melatonin surge.