Despite many diabetic patients having hypercholesterolemia, the association of total cholesterol (TC) levels with CVD risk in type 2 diabetes (T2D) patients is unclear. Diagnosis of type 2 diabetes often leads to changes in total cholesterol (TC) levels. Thus, we examined whether changes in TC levels from pre- to post-diagnosis of T2D were associated with CVD risk. From the National Health Insurance Service Cohort, 23,821 individuals diagnosed with T2D from 2003 to 2012 were followed-up for non-fatal CVD incidence through 2015. Two measurements of TC, 2 years before and after T2D diagnosis, were classified into 3 levels (low, middle, high) to define changes in cholesterol levels. Cox proportional hazards regression was performed to estimate adjusted hazards ratios (aHRs) and 95% confidence intervals (CIs) for the associations between changes in cholesterol levels and CVD risk. Subgroup analyses were performed by use of lipid-lowering drugs. Compared with low–low, aHR of CVD was 1.31 [1.10–1.56] for low–middle and 1.80 [1.15–2.83] for low–high. Compared with middle–middle, aHR of CVD was 1.10 [0.92–1.31] for middle–high but 0.83 [0.73–0.94] for middle–low. Compared with high–high, aHR of CVD was 0.68 [0.56–0.83] for high–middle and 0.65 [0.49–0.86] for high–low. The associations were observed regardless of use of lipid-lowering drugs. For diabetic patients, management of TC levels may be important to lower CVD risk.