OBJECTIVE Lifestyle interventions for type 2 diabetes mellitus (T2DM) are best positioned for success if participants live in supportive neighborhood environments. Deprived neighborhoods increase T2DM risk. Parks and other "green spaces" promote active lifestyles and therefore may reduce T2DM risk. We investigated association between neighborhood green space and the risk of T2DM in a large group of adult Australians. RESEARCH DESIGN AND METHODS Multilevel logit regression was used to fit associations between medically diagnosed T2DM and green space exposure among 267,072 participants in the 45 and Up Study. Green space data were obtained from the Australian Bureau of Statistics, and exposure was calculated using a 1-km buffer from a participant's place of residence. Odds ratios (ORs) were controlled for measures of demographic, cultural, health, diet, active lifestyles, socioeconomic status, and neighborhood circumstances. RESULTS The rate of T2DM was 9.1% among participants in neighborhoods with 0-20% green space, but this rate dropped to approximately 8% for participants with over 40% green space within their residential neighborhoods. The risk of T2DM was significantly lower in greener neighborhoods, controlling for demographic and cultural factors, especially among participants residing in neighborhoods with 41-60% green space land use (OR 0.87; 95% CI 0.83-0.92). This association was consistent after controlling for other explanatory variables and did not vary according to neighborhood circumstances. CONCLUSIONS People in greener surroundings have a lower risk of T2DM. Planning, promoting, and maintaining local green spaces is important in multisector initiatives for addressing the T2DM epidemic.