Background The “healthy obese” hypothesis suggests the risks associated with excess adiposity are reduced in those with higher muscle quality (mass/strength). Alternative possibilities include loss of muscle quality as people become unwell (reverse causality) or unmeasured confounding. Methods and Results We conducted a cohort study using the UK Biobank (n=452 931). Baseline body mass index ( BMI) was used to quantify adiposity and handgrip strength ( HGS ) used for muscle quality. Outcomes were fatal and non‐fatal cardiovascular disease, and mortality. As a secondary analysis we used waist‐hip‐ratio or fat mass percentage instead of BMI , and skeletal muscle mass index instead of HGS . In a subsample, we used gene scores for BMI , waist‐hip‐ratio and HGS in a Mendelian randomization ( MR ). BMI defined obesity was associated with an increased risk of all outcomes (hazard ratio [ HR ] range 1.10–1.82). Low HGS was associated with increased risks of cardiovascular and all‐cause mortality ( HR range 1.39–1.72). HR s for the association between low HGS and cardiovascular disease events were smaller ( HR range 1.05–1.09). There was no suggestion of an interaction between HGS and BMI to support the healthy obese hypothesis. Results using other adiposity metrics were similar. There was no evidence of an association between skeletal muscle mass index and any outcome. Factorial Mendelian randomization confirmed no evidence for an interaction. Low genetically predicted HGS was associated with an increased risk of mortality ( HR range 1.08–1.19). Conclusions Our analyses do not support the healthy obese concept, with no evidence that the adverse effect of obesity on outcomes was reduced by improved muscle quality. Lower HGS was associated with increased risks of mortality in both observational and MR analyses, suggesting reverse causality may not be the sole explanation.