IGF-I shares structural homology and in vitro metabolic activity with insulin. Laboratory models suggest that IGF-I and its binding proteins IGFBP-1 and IGFBP-2 have potentially beneficial effects on diabetes risk, whereas IGFBP-3 may have adverse effects. We therefore conducted a prospective nested case-control investigation of incident diabetes (n = 742 case subjects matched 1:1 to control subjects) and its associations with IGF-axis protein levels in the Nurses' Health Study, a cohort of middle-aged women. The median time to diabetes was 9 years. Statistical analyses were adjusted for multiple risk factors, including insulin and C-reactive protein. Diabetes risk was fivefold lower among women with baseline IGFBP-2 levels in the top versus bottom quintile (odds ratio [OR](q5-q1) = 0.17 [95% CI 0.08-0.35]; P trend < 0.0001) and was also negatively associated with IGFBP-1 levels (OR(q5-q1) = 0.37 [0.18-0.73]; P trend = 0.0009). IGFBP-3 was positively associated with diabetes (OR(q5-q1) = 2.05 [1.20-3.51]; P trend = 0.002). Diabetes was not associated with total IGF-I levels, but free IGF-I and diabetes had a significant association that varied (P interaction = 0.003) by insulin levels above the median (OR(q5-q1) = 0.48 [0.26-0.90]; P trend = 0.0001) versus below the median (OR(q5-q1) = 2.52 [1.05-6.06]; P trend < 0.05). Thus, this prospective study found strong associations of incident diabetes with baseline levels of three IGFBPs and free IGF-I, consistent with hypotheses that the IGF axis might influence diabetes risk.