During resent years it has been suggested that insulin resistance is related to an imbalance between fatty acid (FA) availability and FA oxidation. Studies investigating FA oxidation during exercise in patients with type 2 diabetes (T2D) have shown contradicting results. However, in these studies FA oxidation has only been determined at one or two exercise intensities. Therefore, the purpose of this study was to investigate FA oxidation over a wide range of exercise intensities and thereby determine the maximal fatty acid oxidative capacity (FAT_max) in T2D patients and in well matched control subjects. A second purpose of the study was to assess the effect of aerobic training on FAT_max. Seven T2D patients and seven control subjects matched for age, gender, obesity (BMI) and physical fitness participated in the study. All subjects completed a VO_2peak test and an incremental submaximal exercise test, before and after 10 weeks of aerobic training (stationary bike training, 5 sessions per week, and half an hour per session). Before training there was no difference in FAT_max between groups (average 0.31 g·min­1). Furthermore there was no difference between groups in the intensity needed to elicit FAT_max (average 41% of VO_2peak). Training increased FAT_max significantly (p<0.05) in both groups (T2D 0.45±0.05 and CON 0.44±0.05 g·min^­1). The intensity needed to elicit FAT_max increased to 49±4% of VO_2peak in the control group and 52±4% of VO_2peak in the diabetic group (no significant difference between groups). We conclude that there is no difference between T2D patients and well matched control subjects in FAT_max or the intensity needed to elicit FAT_max. As a result of training, FAT_max and the intensity needed to elicit FAT_max increased to the same extent in both groups.