Reducing high cholesterol levels. It is used along with diet and exercise. It may be used alone or with other medicines. It is also used along with diet and exercise to control blood sugar in patients with type 2 diabetes. It should not be used to treat type 1 diabetes or diabetic ketoacidosis. Colesevelam is a bile acid sequestrant. It works in the bowel to help remove bile acids from the body. The body then uses cholesterol to make more bile acids, which causes blood cholesterol levels to decrease. Exactly how colesevelam works to treat type 2 diabetes is not known.