Type 2 diabetes (T2D) genome-wide association studies (GWASs) often overlook rare variants as a result of previous imputation panels' limitations and scarce whole-genome sequencing (WGS) data. We used TOPMed imputation and WGS to conduct the largest T2D GWAS meta-analysis involving 51,256 cases of T2D and 370,487 controls, targeting variants with a minor allele frequency as low as 5 × 10-5. We identified 12 new variants, including a rare African/African American-enriched enhancer variant near the LEP gene (rs147287548), associated with fourfold increased T2D risk. We also identified a rare missense variant in HNF4A (p.Arg114Trp), associated with eightfold increased T2D risk, previously reported in maturity-onset diabetes of the young with reduced penetrance, but observed here in a T2D GWAS. We further leveraged these data to analyze 1,634 ClinVar variants in 22 genes related to monogenic diabetes, identifying two additional rare variants in HNF1A and GCK associated with fivefold and eightfold increased T2D risk, respectively, the effects of which were modified by the individual's polygenic risk score. For 21% of the variants with conflicting interpretations or uncertain significance in ClinVar, we provided support of being benign based on their lack of association with T2D. Our work provides a framework for using rare variant GWASs to identify large-effect variants and assess variant pathogenicity in monogenic diabetes genes.