Colipase is essential for efficient fat digestion. An arginine-to-cysteine polymorphism at position 92 of colipase (Arg92Cys) associates with an increased risk for developing type-2 diabetes through an undefined mechanism. To test our hypothesis that the extra cysteine increases colipase misfolding, thereby altering its intracellular trafficking and function, we expressed Cys92 colipase in HEK293T cells. Less Cys92 colipase is secreted and more is retained intracellularly in an insoluble form compared with Arg92 colipase. Nonreducing gel electrophoresis suggests the folding of secreted Cys92 colipase differs from Arg92 colipase. Cys92 colipase misfolding does not trigger the unfolded protein response (UPR) or endoplasmic reticulum (ER) stress. The ability of secreted Cys92 colipase to stimulate pancreatic triglyceride lipase (PTL) is reduced with all substrates tested, particularly long-chain triglycerides. The reaction of Cys92 colipase with triolein and Intralipid has a much longer lag time, reflecting decreased ability to anchor PTL on those substrates. Our data predicts that humans with the Arg92Cys substitution will secrete less functional colipase into the duodenum and have less efficient fat digestion. Whether inefficient fat digestion or another property of colipase contributes to the risk for developing diabetes remains to be clarified.