Prior research found increases in diabetes among youth during the COVID-19 pandemic, but few studies examined variation across sociodemographics. To examine diabetes incidence rates among a diverse population of youth in the US before and during the COVID-19 pandemic. This cohort study included data from Kaiser Permanente Southern California (KPSC) between January 1, 2016, and December 31, 2021. KPSC members aged from birth to 19 years with no history of diabetes were included. Individuals were followed up using electronic health records for diabetes incidence defined using diagnoses, laboratory values, and medications. Analyses were conducted between November 2022 and January 2023. Age- and sex-standardized annual and quarterly incidence rates per 100 000 person-years (PYs) were calculated for type 1 diabetes and type 2 diabetes between 2016 and 2021. Rates were calculated within strata of age (<10 and 10-19 years), sex, and race and ethnicity (Asian/Pacific Islander, Hispanic, non-Hispanic Black, non-Hispanic White, and other/multiple/unknown). Using Poisson regression with robust error variances, incidence rate ratios (IRR) comparing 2020 to 2021 with 2016 to 2019 were calculated by diabetes type and within age, sex, and race and ethnicity strata and adjusting for health care utilization. Between 2016 to 2021, there were 1200, 1100, and 63 patients with type 1 diabetes (mean [SD] age, 11.0 [4.5] years; 687 [57.3%] male), type 2 diabetes (mean [SD] age, 15.7 [2.7] years; 516 [46.9%] male), and other diabetes, respectively. Incidence of type 1 diabetes increased from 18.5 per 100 000 PYs in 2016 to 2019 to 22.4 per 100 000 PYs from 2020 to 2021 with increased IRRs among individuals aged 10 to 19 years, male individuals, and Hispanic individuals. Incidence of type 2 diabetes increased from 14.8 per 100 000 PYs from 2016 to 2019 to 24.7 per 100 000 PYs from 2020 to 2021 with increased IRRs among individuals aged 10 to 19 years, male and female individuals, and those with Black, Hispanic, and other/unknown race and ethnicity. In this cohort study of youth in KPSC, incidence of diabetes increased during the COVID-19 pandemic and was more pronounced in specific racial and ethnic groups. Future research to understand differential impacts of physiologic and behavioral risk factors is warranted.