OBJECTIVE We examined the associations of GAD antibodies (GADA) and C-peptide (CP) with insulin initiation, glycemic responses, and severe hypoglycemia in type 2 diabetes (T2D). RESEARCH DESIGN AND METHODS In 5,230 Chinese patients (47.6% men) with T2D (mean ± SD age: 56.5 ± 13.9 years; median diabetes duration: 6 [interquartile range 1, 12] years), enrolled consecutively in 1996–2012 and prospectively observed until 2019, we retrospectively measured fasting CP and GADA in stored serum and examined their associations with aforementioned outcomes. RESULTS At baseline, 28.6% (n = 1,494) had low CP (<200 pmol/L) and 4.9% (n = 257) had positive GADA (GADA+). In the low-CP group, 8.0% had GADA+, and, in the GADA+ group, 46.3% had low CP. The GADA+ group had an adjusted hazard ratio (aHR) of 1.46 (95% CI 1.15–1.84, P = 0.002) for insulin initiation versus the GADA− group, while the low-CP group had an aHR of 0.88 (0.77–1.00, P = 0.051) versus the high-CP group. Following insulin initiation, the GADA+ plus low-CP group had the largest decrements in HbA1c (−1.9% at month 6; −1.5% at month 12 vs. −1% in the other three groups). The aHR of severe hypoglycemia was 1.29 (95% CI 1.10–1.52, P = 0.002) in the low-CP group and 1.38 (95% CI 1.04–1.83, P = 0.024) in the GADA+ group. CONCLUSIONS There is considerable heterogeneity in autoimmunity and β-cell dysfunction in T2D with GADA+ and high CP associated with early insulin initiation, while GADA+ and low CP, increased the risk of severe hypoglycemia. Extended phenotyping is warranted to increase the precision of classification and treatment in T2D.