Aims/hypothesis The aim of this study was to examine the association between baseline body iron stores and new-onset diabetes. Subjects and methods We studied the association between baseline serum ferritin concentration and type 2 diabetes in 360 clinically incident diabetes cases and 758 controls nested within the EPIC (European Prospective Investigation of Cancer)-Norfolk Cohort Study. Serum ferritin levels were categorised into five groups: sex-specific quartiles of the normal range of ferritin and a group with clinically raised ferritin below levels indicative of haemochromatosis. Results Baseline serum ferritin was higher among cases than control participants (geometric mean: men 96.6 vs 67.8 ng/ml, respectively, p<0.001; women 45.9 vs 34.8 ng/ ml, respectively, p=0.005). In analyses adjusted for known risk factors (age, BMI, sex, family history, physical activity, smoking habit) and dietary factors measured by 7-day food diary, the risk of diabetes was markedly elevated in participants with clinically raised ferritin compared with the lowest quartile (odds ratio [OR] 7.4, 95% CI 3.5-15.4). Further adjustment for potential confounding by inflammation (C-reactive protein, IL-6 and fibrinogen) had no material impact on the observed association, while adjustment for hepatic enzymes (alanine aminotransferase and γ glutamyl transferase) and adiponectin attenuated the magnitude of association, but it remained statistically significant (OR 3.2 [1.3-7.6]). Conclusions/interpretation Serum ferritin is an important and independent predictor of the development of diabetes. This finding may have important implications for understanding the aetiology of diabetes.