AIMS/HYPOTHESIS: By use of a parallel and partly crossover randomised, controlled trial design we sought to elucidate the underlying mechanisms behind the advantageous effects of interval walking training (IWT) compared with continuous walking training (CWT) on glycaemic control in individuals with type 2 diabetes. We hypothesised that IWT, more than CWT, would improve insulin sensitivity including skeletal muscle insulin signalling, insulin secretion and disposition index (DI). METHODS: By simple randomisation (sequentially numbered, opaque sealed envelopes), eligible individuals (diagnosed with type 2 diabetes, no exogenous insulin treatment) were allocated to three groups: a control group (CON, n = 8), an IWT group (n = 12) and an energy expenditure-matched CWT group (n = 12). Training groups were prescribed free-living training, five sessions per week (60 min/session). A three-stage hyperglycaemic clamp, including glucose isotope tracers and skeletal muscle biopsies, was performed before and after a 4 month intervention in a hospitalised setting. No blinding was performed. RESULTS: The improved glycaemic control, which was only seen in the IWT group, was consistent with IWT-induced increases in insulin sensitivity index (49.8 ± 14.6%; p < 0.001), peripheral glucose disposal (14.5 ± 4.9%; p < 0.05) and DI (66.2 ± 21.8%; p < 0.001), with no changes in the CWT or CON group. Moreover, only IWT improved insulin signalling in skeletal muscle via increased insulin-stimulated phosphorylation of AS160 (29.0 ± 10.8%; p < 0.05). No changes were seen in insulin secretion during hyperglycaemia alone, hyperglycaemia + glucagon-like peptide 1 infusion or arginine injection. CONCLUSIONS/INTERPRETATION: IWT maintains insulin secretion and improves insulin sensitivity and DI, in contrast to energy expenditure-matched CWT. These results suggest that training with alternating intensity, and not just training volume and mean intensity, is a key determinant of changes in whole body glucose disposal in individuals with type 2 diabetes. TRIAL REGISTRATION: ClinicalTrials (NCT01234155).