OBJECTIVE: This national, population-based study reports diabetes incidence based on oral glucose tolerance tests (OGTTs) and identifies risk factors for diabetes in Australians. RESEARCH DESIGN AND METHODS: The Australian Diabetes, Obesity and Lifestyle Study followed-up 5,842 participants over 5 years. Normal glycemia, impaired fasting glucose (IFG), impaired glucose tolerance (IGT), and diabetes were defined using World Health Organization criteria. RESULTS: Age-standardized annual incidence of diabetes for men and women was 0.8% (95% CI 0.6-0.9) and 0.7% (0.5-0.8), respectively. The annual incidence was 0.2% (0.2-0.3), 2.6% (1.8-3.4), and 3.5% (2.9-4.2) among those with normal glycemia, IFG, and IGT, respectively, at baseline. Among those with IFG, the incidence was significantly higher in women (4.0 vs. 2.0%), while among those with IGT, it was significantly higher in men (4.4 vs. 2.9%). Using multivariate logistic regression, hypertension (odds ratio 1.64 [95% CI 1.17-2.28]), hypertriglyceridemia (1.46 [1.05-2.02]), log fasting plasma glucose (odds ratio per 1 SD 5.25 [95% CI 3.98-6.92]), waist circumference (1.26 [1.08-1.48]), smoking (1.70 [96% CI 1.11-2.63]), physical inactivity (1.56 [1.12-2.16]), family history of diabetes (1.82 [1.30-2.52]), and low education level (1.85 [1.04-3.31]) were associated with incident diabetes. In age- and sex-adjusted models, A1C was a predictor of diabetes in the whole population, in those with normal glycemia, and in those with IGT or IFG. CONCLUSIONS: Diabetes incidence is 10-20 times greater in those with IGT or IFG than those with normal glycemia. Measures of glycemia, A1C, metabolic syndrome components, education level, smoking, and physical inactivity are risk factors for diabetes.