OBJECTIVE Many studies have documented associations between inflammation and type 2 diabetes incidence. We assessed potential variability in this association in the major U.S. racial/ethnic groups. RESEARCH DESIGN AND METHODS Incident type 2 diabetes was assessed among men and women aged 45–84 years without prior clinical cardiovascular disease or diabetes in the prospective Multi-Ethnic Study of Atherosclerosis. Interleukin (IL)-6, fibrinogen, and C-reactive protein (CRP) were measured at baseline (2000–2002); fasting glucose and diabetes medication use was assessed at baseline and three subsequent in-person exams through 2007. Type 2 diabetes was defined as use of diabetes drugs or glucose ≥126 mg/dl. Covariates included baseline demographics, clinic, smoking, alcohol, exercise, hypertension medication, systolic blood pressure, insulin resistance, and BMI. Cox proportional hazards regression was used to calculate hazard ratios (HRs) by quartiles of CRP, IL-6, and fibrinogen. RESULTS Among 5,571 participants (mean age 61.6 years, 53% female, 42.1% white, 11.5% Chinese, 25.7% black, and 20.7% Hispanic), 410 developed incident diabetes during a median follow-up time of 4.7 years (incidence 16.8 per 1,000 person-years). CRP, IL-6, and fibrinogen levels were associated with incident diabetes in the entire sample. After adjustment, the associations were attenuated; however, quartile 4 (versus quartile 1) of IL-6 (HR 1.5 [95% CI 1.1–2.2]) and CRP (1.7 [1.3–2.4]) remained associated with incident diabetes. In stratified analyses, similar associations were observed among white, black, and Hispanic participants. CONCLUSIONS Higher levels of inflammation predict short-term incidence of type 2 diabetes in a multiethnic American sample.