Because polyphenols may have beneficial effects on dyslipidemia, which accelerates atherosclerosis in diabetes, we examined the effect of polyphenols on hepatocellular AMP-activated protein kinase (AMPK) activity and lipid levels, as well as hyperlipidemia and atherogenesis in type 1 diabetic LDL receptor–deficient mice (DMLDLR−/−). In HepG2 hepatocytes, polyphenols, including resveratrol (a major polyphenol in red wine), apigenin, and S17834 (a synthetic polyphenol), increased phosphorylation of AMPK and its downstream target, acetyl-CoA carboxylase (ACC), and they increased activity of AMPK with 200 times the potency of metformin. The polyphenols also prevented the lipid accumulation that occurred in HepG2 cells exposed to high glucose, and their ability to do so was mimicked and abrogated, respectively, by overexpression of constitutively active and dominant-negative AMPK mutants. Furthermore, treatment of DMLDLR−/− mice with S17834 prevented the decrease in AMPK and ACC phosphorylation and the lipid accumulation in the liver, and it also inhibited hyperlipidemia and the acceleration of aortic lesion development. These studies 1) reveal that inactivation of hepatic AMPK is a key event in the pathogenesis of hyperlipidemia in diabetes, 2) point to a novel mechanism of action of polyphenols to lower lipids by activating AMPK, and 3) emphasize a new therapeutic avenue to benefit hyperlipidemia and atherosclerosis specifically in diabetes via activating AMPK.