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Aims Insulin-like growth factor 1 receptor (IGF1R) is involved in cell growth and glucose homeostasis. In the current study, the IGF1R locus was analysed as a candidate gene for type 2 diabetes (T2D) in American Indians. Materials and methods Whole genome sequence data from 335 American Indians identified 3 novel missense variants in IGF1R. The associations of IGF1R variants with T2D, age of T2D onset and birth weight were analysed in a population-based sample of 7701 American Indians. Results A novel glycine-to-aspartic acid substitution (G310D) in IGF1R was identified, which associated with T2D in a sex-specific manner (Psex interaction = 0.02). In women, the aspartic acid (D) allele (frequency = 0.034) was associated with increased risk for T2D (n = 4292, P = 2.0 × 10-5 adjusted for age, birth year, and the first 5 genetic principal components; odds ratio [OR] = 2.23 [1.54-3.23] per risk allele) and an earlier age of T2D onset (n = 4292, P = 2 × 10-4 , hazard rate ratio = 1.45 [1.20-1.75], Psex interaction = 0.05). Female carriers of the D-allele also had lower birth weight (n = 1313, β = -163 g, P = .006, Psex interaction = 0.008). Among 85 siblings discordant for G310D, carriers of the D-allele had shorter stature as compared with carriers of the G-allele (β = -1.6 cm, P = .001, within family model). The G310D variant was functionally studied in vitro, where the D-allele had a 22% increase (P = .0005) in FOXO1-induced transcriptional activity, due to decreased activation of the PI3K/AKT pathway mediated through reduced IGF1R activity. Conclusion A unique G310D variant in IGF1R, which occurs in 6% American Indians, may impair IGF1R signalling pathways, thereby increasing the risk of T2D.