Aminopeptidase N (ANPEP), a membrane-associated ectoenzyme, has been identified as a susceptibility gene for type 2 diabetes (T2D) by genome-wide association and transcriptome studies; however, the mechanisms by which this gene contributes to disease pathogenesis remain unclear. The aim of this study was to determine the comprehensive contribution of ANPEP polymorphisms to T2D risk and annotate the underlying mechanisms. A total of 3206 unrelated individuals including 1579 T2D patients and 1627 controls were recruited for the study. Twenty-three common functional single nucleotide polymorphisms (SNP) of ANPEP were genotyped by the MassArray-4 system. Six polymorphisms, rs11073891, rs12898828, rs12148357, rs9920421, rs7111, and rs25653, were found to be associated with type 2 diabetes for the first time (Pperm<0.05). Common haplotype rs9920421G-rs4932143G-rs7111T was strongly associated with increased risk of T2D (Pperm=5.9x10-12), whereas two rare haplotypes such as rs9920421G-rs4932143C-rs7111T (Pperm=6.5x10-40) and rs12442778A-rs12898828A-rs6496608T-rs11073891C (Pperm=1.0x10-7) possessed strong protection against disease. We identified 38 and 109 diplotypes associated with T2D risk in males and females, respectively (FDR<0.05). ANPEP polymorphisms showed associations with plasma levels of fasting blood glucose, aspartate aminotransferase, total protein and glutathione (P<0.05), and several haplotypes were strongly associated with the levels of reactive oxygen species and uric acid (P<0.0001). A deep literature analysis has facilitated the formulation of a hypothesis proposing that increased plasma levels of ANPEP as well as liver enzymes such as aspartate aminotransferase, alanine aminotransferase and gamma-glutamyltransferase serve as an adaptive response directed towards the restoration of glutathione deficiency in diabetics by stimulating the production of amino acid precursors for glutathione biosynthesis.