OBJECTIVE This study compared the incidence of obstructive sleep apnea (OSA) in patients with and without type 2 diabetes and investigated risk factors for OSA in patients with type 2 diabetes. RESEARCH DESIGN AND METHODS A retrospective cohort study was performed to compare OSA incidence between adult patients with and without type 2 diabetes matched for age, sex, and BMI. Patients with a prevalent OSA diagnosis were excluded. The study cohort was derived from The Health Improvement Network (THIN), a U.K. primary care database, from 1 January 2005 to 31 December 2017. RESULTS There were 3,110 (0.88%) and 5,968 (0.46%) incident OSA cases identified in the 360,250 exposed and 1,296,489 unexposed patient cohorts, respectively. Adjusted incidence rate ratio (aIRR) of OSA in patients with type 2 diabetes compared with those without was 1.48 (95% CI 1.42–1.55; P < 0.001). In a multivariate regression analysis of patients with type 2 diabetes, significant predictors of OSA were diabetes-related foot disease (1.23 [1.06–1.42]; P = 0.005), being prescribed insulin in the last 60 days (1.58 [1.42–1.75]; P < 0.001), male sex (2.27 [2.09–2.46]; P < 0.001), being overweight (2.02 [1.54–2.64]; P < 0.001) or obese (8.29 [6.42–10.69]; P < 0.001), heart failure (1.41 [1.18–1.70]; P < 0.001), ischemic heart disease (1.22 [1.11–1.34]; P < 0.001), atrial fibrillation (1.23 [1.04–1.46]; P = 0.015), hypertension (1.32 [1.23–1.43]; P < 0.001), and depression (1.75 [1.61–1.91]; P < 0.001). CONCLUSIONS When considered alongside previous evidence, this study indicates that the association between type 2 diabetes and OSA is bidirectional. In addition to known predictors of OSA, diabetes-related foot disease and insulin treatment were identified as risk factors in patients with type 2 diabetes.