Abstract Background/Objectives: Decreased plasma concentration of high-density lipoprotein cholesterol (HDL-C) is a risk factor linked to increased risk of cardiovascular disease (CVD). Decreased anti-atherogenic properties of HDL are also implicated in increased CVD risk. The cause is unknown but has been linked to impaired glucose tolerance. The aim of this study was to quantify the modification of HDL by methylglyoxal and related dicarbonyls in healthy people and patients with type 2 diabetes characterise structural, functional and physiological consequences of the modification and predict the importance in high CVD risk groups. Subjects/Methods: Major fractions of HDL, HDL2 and HDL3 were isolated from healthy human subjects and patients with type 2 diabetes and fractions modified by methylglyoxal and related dicarbonyl metabolites quantified. HDL2 and HDL3 were glycated by methylglyoxal to minimum extent in vitro and molecular, functional and physiological characteristics were determined. A one-compartment model of HDL plasma clearance was produced including formation and clearance of dicarbonyl-modified HDL. Results: HDL modified by methylglyoxal and related dicarbonyl metabolites accounted for 2.6% HDL and increased to 4.5% in patients with type 2 diabetes mellitus (T2DM). HDL2 and HDL3 were modified by methylglyoxal to similar extents in vitro. Methylglyoxal modification induced re-structuring of the HDL particles, decreasing stability and plasma half-life in vivo. It occurred at sites of apolipoprotein A-1 in HDL linked to membrane fusion, intramolecular bonding and ligand binding. Kinetic modelling of methylglyoxal modification of HDL predicted a negative correlation of plasma HDL-C with methylglyoxal-modified HDL. This was validated clinically. It also predicted that dicarbonyl modification produces 2–6% decrease in total plasma HDL and 5–13% decrease in functional HDL clinically. Conclusions: These results suggest that methylglyoxal modification of HDL accelerates its degradation and impairs its functionality in vivo, likely contributing to increased risk of CVD—particularly in high CVD risk groups.