Type 2 Diabetes (T2D) is an emerging public health problem in Asia. Although ethnic specific mtDNA polymorphisms have been shown to contribute to T2D risk, the functional effects of the mtDNA polymorphisms and the therapeutic potential of mitochondrial-derived peptides at the mtDNA polymorphisms are underexplored. Here, we showed an Asian-specific mitochondrial DNA variation m. 1382A> C (rs111033358) leads to a K14Q amino acid replacement in MOTS-c, an insulin sensitizing mitochondrial-derived peptide. Meta-analysis of three cohorts (n= 27,527, J-MICC, MEC, and TMM) show that males but not females with the C-allele exhibit a higher prevalence of T2D. In J-MICC, only males with the C-allele in the lowest tertile of physical activity increased their prevalence of T2D, demonstrating a kinesio-genomic interaction. High-fat fed, male mice injected with MOTS-c showed reduced weight and improved glucose tolerance, but not K14Q-MOTS-c treated mice. Like the human data, female mice were unaffected. Mechanistically, K14Q-MOTS-c leads to diminished insulin-sensitization in vitro. Thus, the m. 1382A> C polymorphism is associated with susceptibility to T2D in men, possibly interacting with exercise, and contributing to the risk of T2D in sedentary males by reducing the activity of MOTS-c.