Aims/hypothesis Evidence is emerging of an association between breast cancer and diabetes; however, it is uncertain whether diabetes incidence is increased in postmenopausal breast cancer survivors compared with women without breast cancer. The objective of this study was to determine whether postmenopausal women who develop breast cancer have a higher incidence of diabetes than those who do not develop breast cancer. Methods We used population-based data from Ontario, Canada to compare the incidence of diabetes among women with breast cancer, aged 55 years or older, from 1996 to 2008, with that of age-matched women without breast cancer. We used Cox proportional hazard models to estimate the effect of breast cancer on the cause-specific hazard of developing diabetes overall and in the subgroup of women who received adjuvant chemotherapy. Results Of 24,976 breast cancer survivors and 124,880 controls, 9.7% developed diabetes over a mean follow-up of 5.8 years. The risk of diabetes among breast cancer survivors compared with women without breast cancer began to increase 2 years after diagnosis (HR 1.07 [95% CI, 1.02, 1.12]), and rose to an HR of 1.21 (95% CI, 1.09, 1.35) after 10 years. Among those who received adjuvant chemotherapy (n04,404), risk was highest in the first 2 years after diagnosis (HR 1.24 [95% CI 1.12, 1.38]) and then declined. Conclusions/interpretation We found a modest increase in the incidence of diabetes among postmenopausal breast cancer survivors that varied over time. In most women the risk began to increase 2 years after cancer diagnosis but the highest risk was in the first 2 years in those who received adjuvant therapy. Our study suggests that greater diabetes screening and prevention strategies among breast cancer survivors may be warranted.