As type 2 diabetes mellitus (DM2), obesity and sedentary lifestyles are increasing in developing countries, this observational study investigated the role of physical activity on DM2 in Jamaica. Anthropometry, body composition (by bioelectrical impedance analysis) and glucose tolerance status was assessed in 722 adults in 1993 and 1997. Energy expenditure was estimated in a subset using measured resting energy expenditure in combination with self-reported activity recalls. The rates of impaired glucose tolerance (IGT) were 23.7 and 27.3%, and DM2 were 16.3 and 23.7% among men and women, respectively. After adjusting for body composition, a one-unit increase in physical activity significantly reduced the odds of having diabetes (OR = 0.05; 95% CI: 0.004, 0.66), but not IGT. Hence, decreased physical activity is a significant independent contributor to the high rates of glucose intolerance in Jamaica. Efforts must be directed at minimizing obesity and increasing physical activity in developing countries.