Although over 60 single nucleotide polymorphisms (SNPs) have been identified by meta-analysis of genome-wide association studies for type-2 diabetes (T2D) among individuals of European descent, much of the genetic variation remains unexplained. There are likely many more SNPs that contribute to variation in T2D risk, some of which may lie in the regions surrounding established SNPs--a phenomenon often referred to as allelic heterogeneity. Here, we use the summary statistics from the DIAGRAM consortium meta-analysis of T2D genome-wide association studies along with linkage disequilibrium patterns inferred from a large reference sample to identify novel SNPs associated with T2D surrounding each of the previously established risk loci. We then examine the extent to which the use of these additional SNPs improves prediction of T2D risk in an independent validation dataset. Our results suggest that multiple SNPs at each of 3 loci contribute to T2D susceptibility (TCF7L2, CDKN2A/B, and KCNQ1; p<5×10(-8)). Using a less stringent threshold (p<5×10(-4)), we identify 34 additional loci with multiple associated SNPs. The addition of these SNPs slightly improves T2D prediction compared to the use of only the respective lead SNPs, when assessed using an independent validation cohort. Our findings suggest that some currently established T2D risk loci likely harbor multiple polymorphisms which contribute independently and collectively to T2D risk. This opens a promising avenue for improving prediction of T2D, and for a better understanding of the genetic architecture of T2D.