Background: Smoking cessation is crucial for reducing complications of type 2 diabetes mellitus (T2DM), but associated weight gain can worsen glycemic control, discouraging quitting attempts. Varenicline, a partial agonist of α4β2 nicotinic receptors, aids smoking cessation. This study examines the effects of varenicline on body weight and metabolic parameters in patients with T2DM and prediabetes. Methods: Fifty-three patients were enrolled, of which 32 successfully quit smoking after a three-month course of varenicline and were examined after an additional month with no medication. Measurements taken at baseline, 2.5 months, and 4 months included body weight, blood pressure, resting metabolic rate (RMR), glycated hemoglobin (HbA1c), fasting glucose, blood lipids, C-reactive protein (CRP), appetite-related hormones, and physical activity. Results: Post-treatment, there were no significant changes in body weight, blood pressure, RMR, or glycemic control. Total (CHOL) and low-density lipoprotein (LDL-C) cholesterol decreased significantly at 4 months of the study (from 168 to 156 mg/dL, p = 0.013, and from 96 to 83 mg/dL, p = 0.013, respectively). Leptin levels increased (from 11 to 13.8 ng/dL, p = 0.004), as did glucagon-like peptide-1 (GLP-1) levels (from 39.6 to 45.8 pM, p = 0.016) at 4 months of follow-up. The percentage of participants who reported moderate-intensity activity increased from 28% to 56%, while those reporting high-intensity activity increased from 19% to 22%, respectively (p = 0.039). Conclusions: Our study showed that smoking cessation with varenicline in smokers with T2DM and prediabetes led to significant improvements in lipid profile, significant increase in plasma leptin and GLP-1 levels, and increased physical activity, without significant weight gain. Thus, smoking cessation without weight gain or deteriorated glycemic control is feasible for these smokers, with added benefits to lipid profiles, GLP-1 regulation, and physical activity.