Abstract Background/Introduction Evidence regarding the potential health effects of sleep characteristics among individuals with type 2 diabetes (T2D) is limited. Purpose We aimed to examine sleep characteristics in relation to subsequent risk of cardiovascular disease (CVD), including coronary heart disease (CHD), and stroke, and all-cause and cause-specific mortality among individuals with T2D. Methods We prospectively followed 21,902 men and women with T2D at baseline or diagnosed during follow-up (Nurses' Health Study: 1986-2018, Health Professionals Follow-Up Study: 1986-2018). Sleep characteristics, including sleep duration, snoring, sleep apnea, and sleep quality, were repeatedly assessed using self-reported questionnaires at baseline and follow-up. Associations of sleep characteristics with CVD risk and mortality were assessed using Cox proportional hazards models with adjustments for demographic, dietary and lifestyle factors, and medical history. Results During 170,355 and 196,458 person-years of follow-up in participants with T2D, there were 2,486 incident CVD events and 3,922 deaths, respectively. Compared with sleeping for 7-8 h/day, the multivariable-adjusted hazard ratios (HRs) of sleeping for ≤5 h/day were 1.21 (1.02, 1.45) for CVD incidence, 1.24 (1.20, 1.51) for CHD incidence, 1.40 (1.24, 1.58) for total mortality, 1.52 (1.20, 1.92) for CVD mortality, and 1.27 (1.01, 1.61) for other non-CVD and non-cancer mortality, while the HRs of ≥10 h/day were 1.42 (1.21, 1.66) for total mortality, and 1.63 (1.20, 2.10) for other non-CVD and non-cancer mortality. Furthermore, compared with participants without habitual snoring, those with habitual snoring had a 21%, 24%, 18%, and 33% higher risk for CVD incidence, CHD incidence, CVD mortality, and total mortality, respectively. Compared with participants without diagnosed sleep apnea, those with sleep apnea had a 27%-58% higher risk for CVD incidence, CVD mortality, and total mortality. In addition, lower habitual sleep quality, including sleep difficulties and restless sleep, was associated with a substantially higher risk of CVD, CHD, or CVD mortality. No associations were observed between sleep characteristics with risk of stroke and cancer mortality in individuals with T2D. Conclusions Short and long sleep durations as well as habitual snoring, sleep apnea, and lower sleep quality were independently associated with higher risks of CVD incidence and mortality, particularly CVD mortality in individuals with T2D.