Abstract Background Variations in ‘slope’ (how steep or flat the ground is) may be good for health. As walking up hills is a physiologically vigorous physical activity and can contribute to weight control, greater neighbourhood slopes may provide a protective barrier to weight gain, and help prevent Type 2 diabetes onset. We explored whether living in ‘hilly’ neighbourhoods was associated with diabetes prevalence among the Australian adult population. Methods Participants (≥25 years; n = 11,406) who completed the Western Australian Health and Wellbeing Surveillance System Survey (2003–2009) were asked whether or not they had medically-diagnosed diabetes. Geographic Information Systems (GIS) software was used to calculate a neighbourhood mean slope score, and other built environment measures at 1600 m around each participant’s home. Logistic regression models were used to predict the odds of self-reported diabetes after progressive adjustment for individual measures (i.e., age, sex), socioeconomic status (i.e., education, income), built environment, destinations, nutrition, and amount of walking. Results After full adjustment, the odds of self-reported diabetes was 0.72 (95% CI 0.55-0.95) and 0.52 (95% CI 0.39-0.69) for adults living in neighbourhoods with moderate and higher levels of slope, respectively, compared with adults living in neighbourhoods with the lowest levels of slope. The odds of having diabetes was 13% lower (odds ratio 0.87; 95% CI 0.80-0.94) for each increase of one percent in mean slope. Conclusions Living in a hilly neighbourhood may be protective of diabetes onset or this finding is spurious. Nevertheless, the results are promising and have implications for future research and the practice of flattening land in new housing developments.