Objective: We examined whether circulating concentrations of sex hormones, including estradiol, testosterone, sex hormone–binding globulin (SHBG), and dehydroepiandrosterone sulfate (DHEAS), were associated with alcohol intake or mediated the alcohol–type 2 diabetes (T2D) association.Methods: Among women not using hormone replacement therapy and free of baseline cardiovascular disease, cancer, and diabetes in the Women's Health Study, 359 incident cases of T2D and 359 matched controls were chosen during 10 years of follow-up.Results: Frequent alcohol intake (≥1 drink/day) was positively and significantly associated with higher plasma estradiol concentrations in an age-adjusted model (β = 0.14, 95% confidence interval [CI], 0.03, 0.26), compared to rarely/never alcohol intake. After adjusting for additional known covariates, this alcohol–estradiol association remained significant (β = 0.19, 95% CI, 0.07, 0.30). Testosterone (β = 0.13, 95% CI, −0.05, 0.31), SHBG (β = 0.07, 95% CI, −0.07, 0.20), and DHEAS (β = 0.14, 95% CI, −0.04, 0.31) showed positive associations without statistical significance. Estradiol alone or in combination with SHBG appeared to influence the observed protective association between frequent alcohol consumption and T2D risk, with a 12%–21% reduction in odds ratio in the multivariate-adjusted models.Conclusions: Our cross-sectional analysis showed positive associations between alcohol intake and endogenous estradiol concentrations. Our prospective data suggested that baseline concentrations of estradiol, with or without SHBG, might influence the alcohol–T2D association in postmenopausal women.