OBJECTIVES This study 1) investigated life expectancy and cause-specific mortality rates associated with type 2 diabetes and 2) quantified these relationships in ethnic subgroups. RESEARCH DESIGN AND METHODS This was a cohort study using Clinical Practice Research Datalink data from 383 general practices in England with linked hospitalization and mortality records. A total of 187,968 patients with incident type 2 diabetes from 1998 to 2015 were matched to 908,016 control subjects. Abridged life tables estimated years of life lost, and a competing risk survival model quantified cause-specific hazard ratios (HRs). RESULTS A total of 40,286 deaths occurred in patients with type 2 diabetes. At age 40, white men with diabetes lost 5 years of life and white women lost 6 years compared with those without diabetes. A loss of between 1 and 2 years was observed for South Asians and blacks with diabetes. At age older than 65 years, South Asians with diabetes had up to 1.1 years’ longer life expectancy than South Asians without diabetes. Compared with whites with diabetes, South Asians with diabetes had lower adjusted risks for mortality from cardiovascular (HR 0.82; 95% CI 0.75, 0.89), cancer (HR 0.43; 95% CI 0.36, 0.51), and respiratory diseases (HR 0.60; 95% CI 0.48, 0.76). A similar pattern was observed in blacks with diabetes compared with whites with diabetes. CONCLUSIONS Type 2 diabetes was associated with more years of life lost among whites than among South Asians or blacks, with older South Asians experiencing longer life expectancy compared with South Asians without diabetes. The findings support optimized cardiovascular disease risk factor management, especially in whites with type 2 diabetes.