The term "nonrestorative sleep (NRS)" refers to an unrefreshed feeling at wake-up and is a domain of poor sleep quality. Previous research has demonstrated that NRS is linked to a number of diseases and adverse health outcomes, but less is known regarding the link between NRS and diabetes, particularly in Japanese. We studied 3,665 middle-aged male participants of the Aichi Workers' Cohort Study who were followed-up from 2002 through 2019. Cox proportional hazards models estimated hazard ratios (HRs) and 95% confidence intervals (CIs) of incident type 2 diabetes mellitus (T2DM) in relation to NRS adjusted for potential confounding variables. During a median follow-up of 14.6 years, 421 type 2 diabetes cases were identified. Participants with NRS had a higher crude incidence rate of T2DM (11.2/1,000 person-years), compared to participants without NRS (9.3/1,000 person-years). In the fully adjusted model, individuals who reported having NRS had a significantly higher risk of developing T2DM (HR1.36; 95% CI, 1.10-1.67). The association was observed only in participants under 50 years old (HR 1.82; 95% CI, 1.36-2.43), not in the older (50 years or older) participants (P for interaction = 0.025). In contrast, stratified analyses by the presence of shift work, obesity, or sleep duration showed similar associations in all the strata. NRS was associated with higher risk of T2DM in middle-aged Japanese male workers independent of a variety of lifestyle factors and other sleep problems.