Orlistat is an effective adjunctive treatment to lifestyle modifications in the treatment of obesity. While the majority of current evidence is on the effect of orlistat in obese patients without diabetes, some studies suggest that patients who are obese and have diabetes mellitus lose more weight and have greater improvements in diabetic outcomes when treated with orlistat plus a lifestyle intervention than when treated by lifestyle interventions alone. The aim of this study was to review the evidence of the effects of orlistat on glycaemic control in overweight and obese patients with type 2 diabetes. A systematic review of randomized controlled trials of orlistat in people with type 2 diabetes reporting diabetes outcomes in studies published between January 1990 and September 2013 was conducted. We searched for articles published in English in MEDLINE and EMBASE. Inclusion criteria included all randomized controlled trials of orlistat carried out on adult participants with a body mass index of 25 kg m−2 or over diagnosed with type 2 diabetes, which reported weight change and at least one diabetic outcome. A total of 765 articles were identified out of which 12 fulfilled the inclusion criteria. The overall mean weight reduction (3, 6 and 12 months) in the orlistat group was −4.25 kg (95% CI: −4.5 to −3.9 kg). The mean weight difference between treatment and control groups was −2.10 kg (95% CI: −2.3 to −1.8 kg, P < 0.001), the mean HbA1c difference was −6.12 mmol mol−1 (95% CI: −10.3 to −1.9 mmol mol−1, P < 0.004) and the mean fasting blood glucose difference was −1.16 mmol L−1 (95% CI: −1.4 to −0.8 mmol L−1, P < 0.001). Treatment with orlistat plus lifestyle intervention resulted in significantly greater weight loss and improved glycaemic control in overweight and obese patients with type 2 diabetes compared with lifestyle intervention alone.