This study investigated the role of relative androgen excess, designated by low sex hormone-binding globulin (SHBG), on development of type 2 diabetes in premenopausal African American women. A prospective, longitudinal study was conducted on premenopausal African American women, initially aged 36 to 43 years (n=119). Patients were reexamined 8 years later to determine whether initial androgen status was associated with insulin resistance and development of diabetes. Among patients in the low SHBG tertile, 18% converted to type 2 diabetes by the second examination, as compared with 5% in the mid SHBG tertile and 2.5% in the high SHBG tertile (P=.04). Insulin sensitivity was significantly different among the 3 tertiles (P<.01). There was no significant difference in total cholesterol, high-density lipoprotein, low-density lipoprotein, or triglycerides among the SHBG tertiles. This prospective study demonstrates that relative androgen excess is associated with insulin resistance and increases the risk for development of diabetes in premenopausal African American women.