Exercise is recommended for older patients with type 2 diabetes mellitus (T2DM), and increased physical activity contributes to better management of their condition. The conventional exercise test with treadmill or cycle ergometer (CE) for assessing physical capacity, such as peak oxygen uptake (VO 2 ) and anaerobic threshold (AT), is not always usable for older patients with T2DM. The incremental sit-to-stand (ISTS) exercise is an incremental exercise test using external signals to control the sit-to-stand rate in a given time frame and can be performed in a small space using only a chair. This study aimed to examine the validity of the physical capacity assessment during the ISTS exercise, based on the relationships between the ISTS performance, peak VO 2 , AT on ISTS exercise and CE test, in older patients with T2DM. Twenty-two patients with T2DM (10 men, 12 women; mean age, 68.0 years; range, 61-77 years) performed ISTS exercise (according to an existing protocol) and CE test in a randomized manner. Peak VO 2 , AT, and completion time were determined for the ISTS exercise and CE test. Peak VO 2 during ISTS exercise was significantly associated with that during the CE test (r = 0.89, p < 0.01). The completion time on the ISTS exercise was significantly associated with peak VO 2 (r = 0.80, p < 0.01) and AT on the ISTS exercise (r = 0.78, p < 0.01). The ISTS exercise is a useful tool to determine the physical capacity and estimate peak VO 2 and AT in older people with T2DM.