Objectives This study aimed to investigate the association of FTO methylation level with type 2 diabetes mellitus (T2DM). Methods We conducted a nested case – control study for DNA methylation of FTO in Chinese pople identified from the Rural Chinese Cohort Study with a 6-year follow-up. Controls were matched to the cases on a 1:1 basis by age, sex, ethnicity, marital status, and residence. Unconditional multivariate logistic regression models were used to calculate odds ratios (ORs) and 95% confidence intervals (CIs) for association with Tag-single nucleotide polymorphisms (SNPs) and cytosine guanine (CpG) locus. Haploview was used to analyze the association of possible haplotypes with T2DM. Generalized Multifactor Dimensionality Reduction was used to explore the potential interaction. Results We found a significant association for the CpG9 locus located in the promoter region of FTO with T2DM. With CpG9, the risk of T2DM was 1.84 (1.21–2.80) after adjusting for potential confounders. The Tag-SNPs (rs72803657, rs1558902, rs17817449, rs11076023) nor were possible haplotypes associated with T2DM in the strong linkage disequilibrium region. We found no significant interaction between obesity indexes, serum lipid levels and methylation levels. Conclusions Our study identified a CpG locus located in the promoter region of FTO that altered the T2DM risk independent of body mass index, but the variants of FTO were not significantly associated with T2DM. Our study might provide new insights into the pathways of FTO with T2DM and offer new opportunities for risk stratification and prevention of T2DM among rural Chinese population.