Objective To examine ethnic differences in ectopic fat and associations with incident diabetes. Methods In a UK cohort study, 1338 Europeans, 838 South Asians, and 330 African Caribbeans living in London were aged 40-69 years at baseline. Baseline assessment included blood tests, anthropometry, and questionnaires. Anthropometry-based prediction equations estimated baseline visceral adipose tissue (VAT). Incident diabetes was ascertained from record review, self-report, or oral glucose tolerance testing. Results South Asians had more and African Caribbeans less estimated VAT than Europeans. Both ethnic minorities had larger truncal skinfolds than Europeans. In men, adjustment for risk factors (BMI, smoking, systolic blood pressure, and HDL-cholesterol) markedly attenuated the association between estimated VAT and diabetes in Europeans (standardized subhazard ratios [95% CI]: from 1.74 [1.49, 2.03] to 1.16 [0.77, 1.76]) and African Caribbeans (1.72 [1.26, 2.35] to 1.44 [0.69, 3.02]) but not South Asians (1.60 [1.38, 1.86] to 1.90 [1.37, 2.64]). In women, attenuation was observed only for South Asians (1.80 [1.01, 3.23] to 1.07 [0.49, 2.31]). Associations between truncal skinfolds and diabetes appeared less affected by multivariable adjustment in South Asians and African Caribbeans than Europeans (1.24 [0.97, 1.57] and 1.28 [0.89, 1.82] versus 1.02 [0.77, 1.36] in men; 1.91 [1.03, 3.56] and 1.42 [0.86, 2.34] versus 1.23 [0.74, 2.05] in women). Conclusions Differences in overall truncal fat, as well as VAT, may contribute to the excess of diabetes in South Asian and African Caribbean groups, particularly for women.