Accurate measurements of human body fat distribution are desirable because excessive body fat is associated with impaired insulin sensitivity, type 2 diabetes mellitus (T2DM) and cardiovascular disease. In this study, we hypothesized that the performance of water suppressed (WS) MRI is superior to non-water suppressed (NWS) MRI for volumetric assessment of abdominal subcutaneous (SAT), intramuscular (IMAT), visceral (VAT), and total (TAT) adipose tissues. We acquired T1-weighted images on a 3T MRI system (TIM Trio, Siemens), which was analyzed using semi-automated segmentation software that employs a fuzzy c-means (FCM) clustering algorithm. Sixteen contiguous axial slices, centered at the L4-L5 level of the abdomen, were acquired in eight T2DM subjects with water suppression (WS) and without (NWS). Histograms from WS images show improved separation of non-fatty tissue pixels from fatty tissue pixels, compared to NWS images. Paired t-tests of WS versus NWS showed a statistically significant lower volume of lipid in the WS images for VAT (145.3 cc less, p=0.006) and IMAT (305 cc less, p<0.001), but not SAT (14.1 cc more, NS). WS measurements of TAT also resulted in lower fat volumes (436.1 cc less, p=0.002). There is strong correlation between WS and NWS quantification methods for SAT measurements (r=0.999), but poorer correlation for VAT studies (r=0.845). These results suggest that NWS pulse sequences may overestimate adipose tissue volumes and that WS pulse sequences are more desirable due to the higher contrast generated between fatty and non-fatty tissues.