Background: Sleep disturbance has been significantly associated with the incidence of cardiovascular disease (CVD) in the general population. However, despite the common prevalence of sleep disturbance in patients with type 2 diabetes, its relationship with the risk of CVD remains unclear. Here, we have examined the association of sleep disturbance with the incidence of all CVD and all-cause mortality in patients with newly-diagnosed type 2 diabetes. Methods: We used the Korean National Health Insurance Service-Health Screening Cohort data and included 36,058 patients with new-onset type 2 diabetes aged ≥ 40 years between 2004 and 2007, along with follow-up examinations to 2013. We used the ICD-10 code to measure sleep disturbance as a primary diagnosis and the multivariable Cox proportional hazards regression models to estimate the adjusted hazard ratio (AHR) and 95% confidence interval (CI) of all CVD, coronary heart disease (CHD), stroke, and all-cause mortality. Results: We identified 6897 cases of all CVD (CHD, n = 4138; stroke, n = 2759) and 2890 events of all-cause mortality during a mean follow-up period of 7.0 years. Sleep disturbance was associated with an increased risk of All CVD (AHR, 1.24; 95% CI, 1.06-1.46), CHD events (AHR, 1.24; 95% CI, 1.00-1.53), and all-cause mortality (AHR, 1.47; 95% CI, 1.15-1.87) in patients with new-onset type 2 diabetes. Furthermore, women (AHR, 1.33; 95% CI, 1.06-1.67) and middle-aged adults (AHR, 1.29; 95% CI, 1.02-1.64) with sleep disturbance had a significantly increased risk of CVD than those without; contrarily, men (AHR, 1.45; 95% CI, 1.09-1.95) and older adults (AHR, 1.51; 95% CI, 1.15-1.99) with sleep disturbance were associated with a significantly increased risk of all-cause mortality than those without. Conclusions: Our findings suggest that sleep disturbance is significantly associated with an increased risk of CVD and all-cause mortality in patients with new-onset type 2 diabetes.