Background For unknown reasons, interval training often reduces body weight more than energy-expenditure matched continuous training. We compared the acute effects of time-duration and oxygen-consumption matched interval- vs. continuous exercise on excess post-exercise oxygen consumption (EPOC), substrate oxidation rates and lipid metabolism in the hours following exercise in subjects with type 2 diabetes (T2D). Methods Following an overnight fast, ten T2D subjects (M/F: 7/3; age = 60.3 ± 2.3 years; body mass index (BMI) = 28.3 ± 1.1 kg/m2) completed three 60-min interventions in a counterbalanced, randomized order: 1) control (CON), 2) continuous walking (CW), 3) interval-walking (IW – repeated cycles of 3 min of fast and 3 min of slow walking). Indirect calorimetry was applied during each intervention and repeatedly for 30 min per hour during the following 5 h. A liquid mixed meal tolerance test (MMTT, 450 kcal) was consumed by the subjects 45 min after completion of the intervention with blood samples taken regularly. Results Exercise interventions were successfully matched for total oxygen consumption (CW = 1641 ± 133 mL/min; IW = 1634 ± 126 mL/min, P > 0.05). EPOC was higher after IW (8.4 ± 1.3 l) compared to CW (3.7 ± 1.4 l, P < 0.05). Lipid oxidation rates were increased during the MMTT in IW (1.03 ± 0.12 mg/kg per min) and CW (0.87 ± 0.04 mg/kg per min) compared with CON (0.73 ± 0.04 mg/kg per min, P < 0.01 and P < 0.05, respectively), with no difference between IW and CW. Moreover, free fatty acids and glycerol concentrations, and glycerol kinetics were increased comparably during and after IW and CW compared to CON. Conclusions Interval exercise results in greater EPOC than oxygen-consumption matched continuous exercise during a post-exercise MMTT in subjects with T2D, whereas effects on substrate oxidation and lipid metabolism are comparable.