Abstract Disclosure: J. Seo: None. I. Jung: None. S. Park: None. D. Lee: None. J. Yu: None. H. Cho: None. K. Kim: None. E. Song: None. K. Kim: None. N. Kim: None. H. Yoo: None. S. Kim: None. K. Choi: None. N. Kim: None. C. Shin: None. Weakness or slowness is essential to define sarcopenia rather than less muscle mass. Myosteatosis is associated with low muscle strength and poor physical performance, and ectopic fat deposition is a characteristic of diabetes (DM). We investigated the association between muscle strength/physical performance and myosteatosis by considering DM status and muscle mass in community-dwelling older adults. A total of 982 subjects (447 men and 535 women) aged 54-83 years in 8th examination of the Korean Genome and Epidemiology Study Ansan cohort participated in this study. Handgrip strength (HSG), 4-m walking velocity (VEL) and 30-Seconds Sit-to-Stand Test (STST) were checked, appendicular skeletal muscle mass (ASM) and total muscle mass (TMM) by DXA were measured. In midthigh CT image, total muscle area (TMA) was measured and categorized into 3 components using Hounsfield Unit (HU): normal-attenuation muscle area (NAMA, 35-100HU), low-attenuation muscle area (LAMA, 0-34HU), and inter/intramuscular adipose tissue (IMAT) area. As muscle quality indices, the NAMA index, LAMA index, and IMAT index were defined by dividing each parameter by TMA. DM was diagnosed by fasting glucose ≥126 mg/dL, 2hr-OGTT glucose ≥200 mg/dL, HbA1c ≥6.5% or anti-diabetic medication. Subjects with DM (38% of total subjects) had higher age and body mass index (BMI) compared to non-DM subjects. Prevalence of low muscle mass (M:<7.0kg/m2, F:<5.4kg/m2 of ASM/height2) was not statistically different by the presence of DM (DM vs non-DM, 11.7% vs 9.7% in men, 3.6% vs 7.6% in women). However, prevalence of low HGS (M:<28kg, F:<18kg) and slow VEL (<1.0m/sec) was higher in DM subjects than non-DM subjects (DM vs non-DM, low HSG: 18.3% vs 5.6% in men, 28.0% vs 17.3% in women, slow VEL: 40.6% vs 30.7% in men, 61.7% vs 46.2% in women). After adjusting for age and BMI, men with DM had lower muscle mass (ASM, ASM/height2,), TMA and NAMA index but higher LAMA index and IMAT index compared to men without DM. Also, men with DM had lower HGS (p=0.001) and poor STST (p=0.008) than men without DM. In women, muscle mass and muscle quality indices were not significantly different with or without DM, but women with DM had worse STST than women without DM (p=0.013). Age and sex adjusted HSG, but not VEL and STST, was positively associated with muscle mass (ASM, ASM/height2, ASM/BMI, and TMM). Age and sex adjusted HSG, VEL, and STST were positively associated with NAMA index and negatively associated with LAMA index and IMAT index regardless of DM. Linear regression analysis revealed that both ASM and NAMA (or LAMA) indices were independent association factors for HGS. Subjects with DM showed a more pronounced decrease in physical performance and muscle strength than a decrease in muscle mass. In this population-based cohort, less myosteatosis was associated with greater muscle strength and better physical performance, regardless of muscle mass or DM status. Presentation: 6/2/2024