This study examined the association between the price of healthier food relative to unhealthy food and type 2 diabetes prevalence, incidence and insulin resistance (IR). Data came from the Multi-Ethnic Study of Atherosclerosis exam 5 administered 2010-2012 (exam 4, five years prior, was used only for diabetes incidence) and supermarket food/beverage prices derived from Information Resources Inc. For each individual, average price of a selection of healthier foods, unhealthy foods and their ratio was computed for supermarkets within 3miles of the person's residential address. Diabetes status was confirmed at each exam and IR was assessed via the homeostasis model assessment index. Multivariable-adjusted logistic, modified Poisson and linear regression models were used to model diabetes prevalence, incidence and IR, respectively as a function of price and covariates; 2353 to 3408 participants were included in analyses (depending on the outcome). A higher ratio of healthy-to-unhealthy neighborhood food price was associated with greater IR (4.8% higher HOMA-IR score for each standard deviation higher price ratio [95% CI -0.2% to 10.1%]) after adjusting for region, age, gender, race/ethnicity, family history of diabetes, income/wealth index, education, smoking status, physical activity, and neighborhood socioeconomic status. No association with diabetes incidence (relative risk=1.11, 95% CI 0.85 to 1.44) or prevalence (odds ratio=0.95, 95% CI 0.81 to 1.11) was observed. Higher neighborhood prices of healthier food relative to unhealthy food were positively associated with IR, but not with either diabetes outcome. This study provides new insight into the relationship between food prices with IR and diabetes.