Abstract Aims/hypothesis This study aimed to evaluate associations of height as well as components of height (sitting height and leg length) with risk of type 2 diabetes and to explore to what extent associations are explainable by liver fat and cardiometabolic risk markers. Methods A case-cohort study within the European Prospective Investigation into Cancer and Nutrition (EPIC)-Potsdam study comprising 26,437 participants who provided blood samples was designed. We randomly selected a subcohort of 2500 individuals (2029 diabetes-free at baseline and with anamnestic, anthropometrical and metabolic data for analysis). Of the 820 incident diabetes cases identified in the full cohort during 7 years of follow-up, 698 remained for analyses after similar exclusions. Results After adjustment for age, potential lifestyle confounders, education and waist circumference, greater height was related to lower diabetes risk (HR per 10 cm, men 0.59 [95% CI 0.47, 0.75] and women 0.67 [0.51, 0.88], respectively). Leg length was related to lower risk among men and women, but only among men if adjusted for total height. Adjustment for liver fat and triacylglycerols, adiponectin and C-reactive protein substantially attenuated associations between height and diabetes risk, particularly among women. Conclusions/interpretation We observed inverse associations between height and risk of type 2 diabetes, which was largely related to leg length among men. The inverse associations may be partly driven by lower liver fat content and a more favourable cardiometabolic profile.