Background Type 2 diabetes mellitus (T2DM) and obesity are complex pandemic diseases in the 21st century. Worldwide, the T allele rs7903146 in the TCF7L2 gene is recognized as a strong GWAS signal associated with T2DM. However, the association between the C allele and obesity is still poorly explored and needs to be replicated in other populations. Thus, the primary objectives of this study were to evaluate the TCF7L2 rs7903146 association with T2DM according to BMI status and to determine if this variant is related to obesity and BMI variation in a cohort of elderly Brazilians. Methods A total of 1,023 participants from an elderly census-based cohort called SABE (Saúde, Bem Estar e Envelhecimento—Health, Well-Being and Aging) were stratified by BMI status and type 2 diabetes presence. The TCF7L2 genotypes were filtered from the Online Archive of Brazilian Mutations (ABraOM—Online Archive of Brazilian Mutations) database, a web-based public database with sequencing data of samples of the SABE’s participants. Logistic regression models and interaction analyses were performed. The BMI variation (∆BMI) was calculated from anthropometric data collected in up to two time-points with a ten-year-assessment interval. Results The association between the rs7903146 T allele and T2DM was inversely proportional to the BMI status, with an increased risk in the normal weight group (OR 3.36; 95% CI [1.46–7.74]; P = 0.004). We confirmed the T allele association with risk for T2DM after adjusting for possible confound ing variables (OR 2.35; 95% CI [1.28–4.32]; P = 0.006). Interaction analysis showed that the increased risk for T2DM conferred by the T allele is modified by BMI (P_interaction = 0.008), age (P_interaction = 0.005) and gender (P_interaction = 0.026). A T allele protective effect against obesity was observed (OR 0.71; 95% CI [0.54–0.94]; P = 0.016). The C allele increased obesity risk (OR 1.40; 95% CI [1.06–1.84]; P = 0.017) and the CC genotype showed a borderline association with abdominal obesity risk (OR 1.28; 95% CI [1.06–1.67]; P = 0.045). The CC genotype increased the obesity risk factor after adjusting for possible confounding variables (OR 1.41; 95% CI [1.06–1.86]; P = 0.017). An increase of the TT genotype in the second tertile of ∆BMI values was observed in participants without type 2 diabetes (OR 5.13; 95% CI [1.40–18.93]; P = 0.009) in the recessive genetic model. Conclusion We confirmed that the rs7903146 is both associated with T2DM and obesity. The TCF7L2 rs7903146 T allele increased T2DM risk in the normal weight group and interacted with sex, age and BMI, while the C allele increased obesity risk. The TT genotype was associated with a lesser extent of BMI variation over the SABE study’s 10-year period.