OBJECTIVE—Our aim was to assess the risk of major amputation or death after leg bypass surgery for critical limb ischemia in patients with diabetes versus those without. RESEARCH DESIGN AND METHODS—We did a population-based cohort study by linking nationwide databases in Sweden. We identified 1,840 patients in the Swedish Vascular Registry who had their first leg bypass procedure for critical lower-limb ischemia between 1 January 2001 and 31 December 2003—742 with and 1,098 without diabetes. Our primary end point was first major amputation of the limb on which bypass was done or death. Individuals were followed up until 31 December 2005 through the National Hospital Patient Registry and the Cause-of-Death Registry. RESULTS—Incidence of ipsilateral amputation or death was higher in patients with diabetes than in patients without (30.2 vs. 22 events/100 person-years; crude hazard ratio [HR] 1.32 [95% CI 1.17–1.50]). Similarly, individuals with diabetes had a shorter amputation-free survival period than individuals without (2.3 years, range 1.9–2.8 vs. 3.4 years, range 3.1–3.7). Adjustment for demographic characteristics, comorbidities, and risk factors for amputation or death did not substantially affect the risk (HR 1.46 [95% CI 1.26–1.69]). The effect was more pronounced in male (1.75 [1.47–2.08]) than in female (1.35 [1.11–1.64]) patients after adjustment for age. CONCLUSIONS—Diabetes is associated with lower amputation–free survival after leg bypass for critical limb ischemia. Patients with diabetes and limb ischemia need intensified treatment of diabetes-related risk factors to improve outcome.