Aims/hypothesis To examine the association of serum cystatin C with the incidence of type 2 diabetes mellitus over a 15-year follow-up period. Methods The 15-year cumulative incidence of diabetes was measured in a cohort of Beaver Dam Eye Study participants (n=3472, 1988–2003). A person was defined as developing diabetes (a positive history of diabetes mellitus treated with insulin, oral hypoglycemic agents and/or diet, or had elevations in glycosylated hemoglobin levels) in the absence of diabetes at baseline. The relation of cystatin C and other risk factors to incident type 2 diabetes was determined using discrete time extension of the proportional hazards model. Results The 15-year cumulative incidence of diabetes was estimated to be 9.6%. After controlling for age, sex, body mass index, smoking status, glycosylated hemoglobin, proteinuria, chronic kidney disease status, and hypertension status, serum cystatin C at baseline was associated with the 15-year cumulative incidence of type 2 diabetes (Odds Ratio per log of cystatin C unit 2.19, and 95% Confidence Interval 1.02, 4.68). Conclusions/interpretation These findings show a positive relationship of serum cystatin C levels with the incidence of type 2 diabetes mellitus independently of confounding risk factors. The findings strongly suggest the need for further evaluation of the potential importance of cystatin C in pathogenesis of type 2 diabetes mellitus.