Aims: To examine variation between general practices in the prescription of lipid-lowering treatment to people with screen-detected Type 2 diabetes, and associations with practice and participant characteristics and risk of cardiovascular events and all-cause mortality. Methods: Observational cohort analysis of data from 1533 people with screen-detected Type 2 diabetes aged 40-69 years from the ADDITION-Denmark study. One hundred and seventy-four general practices were cluster randomized to receive: (1) routine diabetes care according to national guidelines (623 individuals), or (2) intensive multifactorial target-driven management (910 individuals). Multivariable logistic regression was used to quantify the association between the proportion of individuals in each practice who redeemed prescriptions for lipid-lowering medication in the two years following diabetes diagnosis and a composite cardiovascular disease (CVD) outcome, adjusting for age, sex, prevalent chronic disease, baseline CVD risk factors, smoking and lipid-lowering medication, and follow-up time. Results: The proportion of individuals treated with lipid-lowering medication varied widely between practices (0-100%). There were 118 CVD events over 9431 person-years of follow-up. For the whole trial cohort, the risk of CVD was significantly higher in practices in the lowest compared with the highest quartile for prescribing lipid-lowering medication [adjusted odds ratio (OR) 3.4, 95% confidence interval (CI) 1.6-7.3]. Similar trends were found for all-cause mortality. Conclusions: More frequent prescription of lipid-lowering treatment was associated with a lower incidence of CVD and all-cause mortality. Improved understanding of factors underlying practice variation in prescribing may enable more frequent use of lipid-lowering treatment. The results highlight the benefits of intensive treatment of people with screen-detected diabetes (Clinical Trials Registry No; NCT 00237549).