Muscle dysfunction is considered a sign of poor prognosis in patients with type 2 diabetes (T2D). Thus, early detection of muscle disorders is particularly important in the T2D population. Free fatty acids (FFAs) are clinical indicators of metabolic diseases and muscle function; hence, we aimed to investigate the association between FFAs and muscle function.A total of 160 adult subjects with T2D were characterized and analyzed in this study. Muscle mass and function were measured by walking speed, grip strength and height-adjusted appendicular skeletal muscle mass (ASMM). Partial correlation was applied to explore the correlations between FFAs and muscle indicators. Receiver operating characteristic (ROC) curves were utilized to determine the diagnostic value of FFAs in muscle mass and function.The FFAs levels were negatively correlated with ASMM (r = -0.347, P = 1.0E-05), grip strength (r = -0.313, P = 7.1E-05) and walking speed (r = -0.167, P = 0.039). Notably, the relationships between FFAs levels and ASMM and walking speed remained significant even after adjusting for age, sex, body mass index (BMI), diabetes duration, and hemoglobin A1C (HbA1c). The combination of conventional indicators, including age, BMI, and HbA1c levels, provided a discrimination of low grip strength with an AUC of 0.648, and low walking speed with an AUC of 0.714. Importantly, when FFAs levels were added to the model, the value of the ROC curve was further improved, with an AUC of 0.785 for low grip strength and 0.755 for low walking speed.The current study demonstrated a negative correlation between FFAs and muscle indicators in adult patients with T2D after adjusting for HbA1c levels. FFAs may play an important role in the pathological processes of muscle dysfunction in adults with T2D.© 2022. The Author(s), under exclusive licence to Springer Science+Business Media, LLC, part of Springer Nature.