OBJECTIVE To examine the effect of childbearing and maternal breastfeeding on a woman's subsequent risk of developing type 2 diabetes. RESEARCH DESIGN AND METHODS Using information on parity, breastfeeding, and diabetes collected from 52,731 women recruited into a cohort study, we estimated the risk of type 2 diabetes using multivariate logistic regression. RESULTS A total of 3,160 (6.0%) women were classified as having type 2 diabetes. Overall, nulliparous and parous women had a similar risk of diabetes. Among parous women, there was a 14% (95% CI 10–18%, P < 0.001) reduced likelihood of diabetes per year of breastfeeding. Compared to nulliparous women, parous women who did not breastfeed had a greater risk of diabetes (odds ratio 1.48, 95% CI 1.26–1.73, P < 0.001), whereas for women breastfeeding, the risk was not significantly increased. CONCLUSIONS Compared with nulliparous women, childbearing women who do not breastfeed have about a 50% increased risk of type 2 diabetes in later life. Breastfeeding substantially reduces this excess risk.