The purpose of the project is to better understand how exercise and education will help mobility and health in older adults with diabetes. The investigators are trying to learn what type of exercises and classes are needed to help older adults stay active. This knowledge will eventually prove useful in helping patients and doctors understand what is needed to keep older adults with Type 2 diabetes as healthy as possible.

1. Information and health screening: Interested persons are screened for eligibility and undergo a directed medical history and examination, echocardiogram (if not done within one year), limited ABI test, and maximal treadmill test with oxygen kinetics.
2. Measure fitness level at the beginning of the exercise training, at 10 and 20 weeks: DEXA scan, body fat analysis, strength and balance measurements, and blood tests.
3. Train for 10 weeks in a supervised small group format. Classes meet three times a week for an hour. Participants are randomly assigned to:

1) Flexibility and toning exercises + health education, or 2) Functional circuit training + home activities + tailored physical activity guidance.

4. Follow-up phone calls for an additional 10 weeks.

Inclusion Criteria:

• History of type 2 diabetes on medications
• Age 60 or older
• Able to attend local class 3 times per week for 10 weeks

Exclusion Criteria:

• Ejection fraction <40%
• Symptomatic obstructive valvular disease (primarily aortic stenosis)
• Atrial fibrillation with poor rate control (particularly during exercise), or high grade AV block
• Substantial dementia (Folstein Mini Mental State Examination <24 out of 30)
• Blood tests suggesting severe renal (Cr>3.0) or hepatic (transaminases>4x normal) disease
• Alcohol intake >3 oz/day
• Hemiplegia or lower limb amputation
• Participating in regular exercise 2 or more hours per week.
• Significant orthopedic or musculoskeletal condition that limits weight bearing
• Acute medical conditions, such as acute flare-up of joint condition or infection
• Normal FBS in those with equivocal diabetes history (< 130)