The lower cutoff limit used to define impaired fasting glucose (IFG) varies between countries/organizations and is usually 100 or 110 mg/dl. Therefore, we evaluated the cutoff value for IFG that predicted the development of type 2 diabetes among the participants of the Funagata Study, a Japanese population-based, longitudinal study. Overall, 3,413 individuals (age 56.2 ± 12.1 years) without diabetes at baseline and who attended follow-up examinations were included in this analysis. Diabetes was diagnosed based on 75-g oral glucose tolerance tests according to the 1998 World Health Organization criteria. Follow-up visits were completed in 2007 (mean follow-up 147 months). The development of diabetes was used as the endpoint. During the follow-up period, 156 individuals developed diabetes. Life-table method analysis showed significantly decreased diabetes-free survival in individuals with fasting plasma glucose (FPG) ≥ 96 mg/dl (p = 0.002). Cox’s proportional hazard model analyses showed a high risk for the development of diabetes in individuals with FPG ≥ 101 mg/dl. The hazard ratio for patients with an FPG of 101–105 mg/dl was 5.50 (95% confidence interval (CI) 2.12–14.25; p < 0.001). The 5-year incidence of diabetes was also substantially increased in individuals with FPG ≥ 101 mg/dl. The odds ratio for patients with FPG 101–105 mg/dl was 10.9 (95% CI 2.6–46.0; p < 0.001). Receiver operating characteristic curve analysis showed an optimal FPG cutoff value of 100 mg/dl. Based on these results, the optimal FPG cutoff value used to define IFG in Japanese individuals should be 100 mg/dl rather than 110 mg/dl.