Abstract Context The associations of vegetable and potato intakes with type 2 diabetes (T2D) appear to be nuanced, depending on vegetable types and preparation method, respectively. Objective We investigated the associations of total vegetable, vegetable subgroup, and potato intakes with (1) markers of T2D at baseline and (2) incident T2D cumulative over a 12-year follow-up period in Australian adults. Methods Using data from the Australian Diabetes, Obesity and Lifestyle Study, intakes of vegetables and potatoes were assessed via a food frequency questionnaire at baseline. Associations between vegetable intake and (1) fasting plasma glucose (FPG), 2-hour postload plasma glucose (PLG), updated homeostasis model assessment of β-cell function (HOMA2-%β), HOMA2 of insulin sensitivity (HOMA2-%S), and fasting insulin levels at baseline; and (2) cumulative incident T2D at the end of 12-year follow-up were examined using generalized linear and Cox proportional hazards models, respectively. Results In total, 8009 participants were included having median age of 52 years, and vegetable intake of 132 g/day. Higher intake of total vegetable, green leafy, yellow/orange/red, and moderate intakes of cruciferous vegetables was associated with lower PLG. Additionally, higher green leafy vegetable intake was associated with lower HOMA2-%β and serum insulin. Conversely, higher potato fries/chips intakes were associated with higher FPG, HOMA2-%β, serum insulin, and lower HOMA2-%S. Participants with moderate cruciferous vegetables intake had a 25% lower risk of T2D at the end of 12 years of follow-up. Conclusion A higher intake of vegetables, particularly green leafy vegetables, may improve while consuming potato fries/chips, but not potatoes prepared in a healthy way, may worsen glucose tolerance and insulin sensitivity. Our findings suggest a nuanced relationship between vegetable subgroups and their impact on glucose tolerance.