OBJECTIVE - Although there is consensus that excess adiposity is strongly associated with type 2 diabetes, its relationship with weight change is less clear. This study investigates the relative impact of BMI at baseline and short-term (2- or 3-year) weight changes on the incidence of diabetes. RESEARCH DESIGN AND METHODS - Prospective data were collected from a population-based cohort of middle-aged women participating in the Australian Longitudinal Study on Women's Health (n = 7,239 for this report). To date, participants have completed four mailed surveys (S1, 1996; S2, 1998; S3, 2001; and S4, 2004). Generalized estimating equations were used to model binary repeated-measures data to assess the impact of BMI at S1 and weight change (S1 to S2; S2 to S3) on 3-year incidence of diabetes at S3 and S4, respectively, adjusting for sociodemographic and lifestyle factors. RESULTS - BMI at S1 was strongly associated with the development of diabetes by S3 or S4. Compared with women who had a BMI <25 kg/m2, those with BMI ≥25 kg/m2 had higher incidence of diabetes (P < 0.0001), with odd ratios reaching 12.1 (95% CI 7.6-19.3) for women in the very obese group (BMI ≥35 kg/m2). There was no association between shorter-term weight gain or weight loss on first-reported diagnosis of diabetes (P = 0.08). CONCLUSIONS - Because women's risk of developing type 2 diabetes in midlife is more closely related to their initial BMI (when aged 45-50 years) than to subsequent short-term weight change, public health initiatives should target the prevention of weight gain before and during early adulthood.