This study will enroll people who are overweight or obese and have type 2 diabetes or prediabetes. Participants will attend a baseline study visit and complete blood pressure measurements; muscle strength measurements; a treadmill test to evaluate cardiovascular fitness; an echocardiogram to obtain images of the heart; tests to measure blood vessel function; a dual energy x-ray absorptiometry (DEXA) scan to measure body fat, muscle tissue, and bone density; questionnaires to assess physical activity levels, quality of life, and mood; and a blood collection. A portion of blood will be stored for future genetic testing. Women will also provide a urine sample for pregnancy testing. Participants will also keep a food diary for 3 days. Participants will then be randomly assigned to either a weight loss diet group or a weight loss diet plus exercise group. All participants will attend study visits with a dietitian for weight loss counseling once a week during Months 1 and 2, and every other week in Months 3 through 6. At each of these visits, participants' weight will be measured. Blood pressure measurements will also occur at least once a month.