Clonal hematopoiesis of indeterminate potential (CHIP) is an aging-related accumulation of somatic mutations in hematopoietic stem cells, leading to clonal expansion. CHIP presence has been implicated in atherosclerotic coronary heart disease (CHD) and all-cause mortality, but its association with incident type 2 diabetes (T2D) is unknown. We hypothesized that CHIP is associated with elevated risk of T2D. CHIP was derived from whole-genome sequencing of blood DNA in the National Heart, Lung, and Blood Institute Trans-Omics for Precision Medicine (TOPMed) prospective cohorts. We performed analysis for 17,637 participants from six cohorts, without prior T2D, cardiovascular disease, or cancer. We evaluated baseline CHIP versus no CHIP prevalence with incident T2D, including associations with DNMT3A, TET2, ASXL1, JAK2, and TP53 variants. We estimated multivariable-adjusted hazard ratios (HRs) and 95% CIs with adjustment for age, sex, BMI, smoking, alcohol, education, self-reported race/ethnicity, and combined cohorts' estimates via fixed-effects meta-analysis. Mean (SD) age was 63.4 (11.5) years, 76% were female, and CHIP prevalence was 6.0% (n = 1,055) at baseline. T2D was diagnosed in n = 2,467 over mean follow-up of 9.8 years. Participants with CHIP had 23% (CI 1.04, 1.45) higher risk of T2D than those with no CHIP. Specifically, higher risk was for TET2 (HR 1.48; CI 1.05, 2.08) and ASXL1 (HR 1.76; CI 1.03, 2.99) mutations; DNMT3A was nonsignificant (HR 1.15; CI 0.93, 1.43). Statistical power was limited for JAK2 and TP53 analyses. CHIP was associated with higher incidence of T2D. CHIP mutations located on genes implicated in CHD and mortality were also related to T2D, suggesting shared aging-related pathology.