Type 2 diabetes (T2DM) is a burdensome, costly and debilitating disease that causes premature morbidity and mortality. Recent evidence suggests that T2DM is in part an inflammatory disease. It is well known that serum albumin is a negative acute phase reactant, yet few studies have examined the association between albumin and risk of T2DM. The purpose of this analysis was to prospectively examine the association between serum albumin and incident type 2 diabetes in middle-aged and older adults from a defined population. The Western New York Health Study enrolled apparently healthy participants ages 35-79 yrs from Niagara and Erie counties, NY. For this report, at baseline (1996-2001) all participants from the Western New York Health Study had fasting plasma glucose <110 mg/dl. At follow-up, six years later each case (n=61) was matched with up to three controls (n=158) on gender, race/ethnicity, the year of study enrollment, and baseline fasting glucose <110 mg/dl or 110-125 mg/dl. Diabetes at follow-up was defined as: 1) fasting plasma glucose > 125 mg/dl; 2) random glucose >199 mg/dl; or 3) a physician diagnosis and receiving antidiabetic medication. Conditional logistic regression was used to estimate the odds ratio (95% CI) of developing type 2 diabetes by tertile of baseline albumin adjusted for the matching criteria and additional covariates including BMI, smoking and physical activity. Mean age was 58 years; 60% women; 93% White. Multivariate analyses indicated that cases had lower baseline albumin concentrations (OR = 0.41, 95%CI: 0.17, 0.99 (p=0.04; lowest tertile vs highest) (p trend < 0.05). Further analyses indicated that this relation was independent of hs-CRP and IL-6. Stratification by smoking status did not alter the findings. The results of this analysis support the hypothesis that individuals with lower albumin concentrations were more likely to develop type 2 diabetes than those with higher levels.