Importance: Posttraumatic stress disorder (PTSD) is associated with increased risk of type 2 diabetes (T2D). Improvement in PTSD has been associated with improved self-reported physical health and hypertension; however, there is no literature, to our knowledge, on whether PTSD improvement is associated with T2D risk. Objective: To examine whether clinically meaningful PTSD symptom reduction is associated with lower risk of T2D. Design, Setting, and Participants: This retrospective cohort study examined Veterans Health Affairs medical record data from 5916 patients who received PTSD specialty care between fiscal years 2008 and 2012 and were followed up through fiscal year 2015. Eligible patients had 1 or more PTSD Checklist (PCL) scores of 50 or higher between fiscal years 2008 and 2012 and a second PCL score within the following 12 months and at least 8 weeks after the first PCL score of 50 or higher. The index date was 12 months after the first PCL score. Patients were free of T2D diagnosis or an antidiabetic medication use for 12 months before the index date and had at least 1 visit after the index date. Data analyses were completed during January 2019. Exposures: Reduction in PCL scores during a 12-month period was used to define patients as those with a clinically meaningful improvement (≥20-point PCL score decrease) and patients with less or no improvement (<20-point PCL score decrease). Main Outcomes and Measures: Incident T2D diagnosed during a 2- to 6-year follow-up. Results: Medical records from a total of 1598 patients (mean [SD] age, 42.1 [13.4] years; 1347 [84.3%] male; 1060 [66.3%] white) were studied. The age-adjusted cumulative incidence of T2D was 2.6% among patients with a clinically meaningful PCL score decrease and 5.9% among patients without a clinically meaningful PCL score decrease (P =.003). After control for confounding, patients with a clinically meaningful PCL score decrease were significantly less likely to develop T2DM compared with those without a clinically meaningful decrease (hazard ratio, 0.51; 95% CI, 0.26-0.98). Conclusions and Relevance: The findings suggest that clinically meaningful reductions in PTSD symptoms are associated with a lower risk of T2D. A decrease in PCL score, whether through treatment or spontaneous improvement, may help mitigate the greater risk of T2D in patients with PTSD.