OBJECTIVE - Hyperinsulinemia may promote mammary carcinogenesis. Insulin resistance has been linked to an increased risk of breast cancer and is also characteristic of type 2 diabetes. We prospectively evaluated the association between type 2 diabetes and invasive breast cancer incidence in the Nurses' Health Study. RESEARCH DESIGN AND METHODS - A total of 116,488 female nurses who were 30-55 years old and free of cancer in 1976 were followed through 1996 for the occurrence of type 2 diabetes and through 1998 for incident invasive breast cancer, verified by medical records and pathology reports. RESULTS - During 2.3 million person-years of follow-up, we identified 6,220 women with type 2 diabetes and 5,189 incident cases of invasive breast cancer. Women with type 2 diabetes had a modestly elevated incidence of breast cancer (hazard ratio [HR] = 1.17; 95% CI 1.01-1.35) compared with women without diabetes, independent of age, obesity, family history of breast cancer, history of benign breast disease, reproductive factors, physical activity, and alcohol consumption. This association was apparent among postmenopausal women (1.16; 0.98-1.62) but not premenopausal women (0.83; 0.48-1.42). The association was predominant among women with estrogen receptor-positive breast cancer (1.22; 1.01-1.47). CONCLUSIONS - Women with type 2 diabetes may have a slightly increased risk of breast cancer.