Using data from the China Kadoorie Biobank Study, we conducted a prospective investigation on the association between type 2 diabetes mellitus (T2DM) and cancer risk in Chinese adults. A total of 508,892 participants (mean age = 51.5 (standard deviation, 10.7) years) without prior cancer diagnosis at baseline (2004-2008) were included. We documented 17,463 incident cancer cases during follow-up through December 31, 2013. Participants with T2DM had increased risks of total and certain site-specific cancers; hazard ratios were 1.13 (95% confidence interval (CI): 1.07, 1.19) for total cancer, 1.51 (95% CI: 1.29, 1.76) for liver cancer, 1.86 (95% CI: 1.43, 2.41) for pancreatic cancer, and 1.21 (95% CI: 1.01, 1.47) for female breast cancer. The associations were largely consistent when physician-diagnosed and screen-detected T2DM were analyzed separately, except for colorectal cancer (for physician-diagnosed T2DM, HR = 0.91 (95% CI: 0.73, 1.13), and for screen-detected T2DM, HR = 1.44 (95% CI: 1.18, 1.77)). In participants without a prior diagnosis of T2DM, higher random blood glucose levels were positively associated with risks of total cancer, liver cancer, and female breast cancer (all P's for trend ≤ 0.02). In conclusion, T2DM is associated with an increased risk of new-onset cancer in China, particularly cancers of the liver, pancreas, and female breast.