Intrauterine exposure to diabetes is associated with an excess of diabetes and obesity in the offspring, but the effects of intrauterine exposure are confounded by genetic factors. To determine the role of the intrauterine diabetic environment per se, the prevalence of diabetes and the mean BMI were compared in siblings born before and after their mother was recognized as having diabetes. Nuclear families in which at least one sibling was born before and one after the mother was diagnosed with type 2 diabetes were selected. Consequently, the siblings born before and after differed in their exposure to diabetes in utero. A total of 58 siblings from 19 families in which at least one sibling had diabetes were examined at similar ages (within 3 years). The risk of diabetes was significantly higher in siblings born after the mother developed diabetes than in those born before the mother's diagnosis of diabetes (odds ratio 3.7, P = 0.02). In 52 families, among 183 siblings without diabetes, the mean BMI was 2.6 kg/m2 higher in offspring of diabetic than in offspring of nondiabetic pregnancies (P = 0.003). In contrast, there were no significant differences in risk of diabetes or BMI between offspring born before and after the father was diagnosed with diabetes. Intrauterine exposure to diabetes per se conveys a high risk for the development of diabetes and obesity in offspring in excess of risk attributable to genetic factors alone.