Circulating sex hormone-binding globulin levels are inversely associated with insulin resistance, but whether these levels can predict the risk of developing type 2 diabetes is uncertain. We performed a nested case-control study of postmenopausal women in the Women's Health Study who were not using hormone therapy (359 with newly diagnosed type 2 diabetes and 359 controls). Plasma levels of sex hormone-binding globulin were measured; two polymorphisms of the gene encoding sex hormone-binding globulin, SHBG, that were robustly associated with the protein levels were genotyped and applied in mendelian randomization analyses. We then conducted a replication study in an independent cohort of men from the Physicians' Health Study II (170 with newly diagnosed type 2 diabetes and 170 controls). Among women, higher plasma levels of sex hormone-binding globulin were prospectively associated with a lower risk of type 2 diabetes: multivariable odds ratios were 1.00 for the first (lowest) quartile of plasma levels, 0.16 (95% confidence interval [CI], 0.08 to 0.33) for the second quartile, 0.04 (95% CI, 0.01 to 0.12) for the third quartile, and 0.09 (95% CI, 0.03 to 0.21) for the fourth (highest) quartile (P<0.001 for trend). These prospective associations were replicated among men (odds ratio for the highest quartile of plasma levels vs. the lowest quartile, 0.10; 95% CI, 0.03 to 0.36; P<0.001 for trend). As compared with homozygotes of the respective wild-type allele, carriers of a variant allele of the SHBG single-nucleotide polymorphism (SNP) rs6259 had 10% higher sex hormone-binding globulin levels (P=0.005), and carriers of an rs6257 variant had 10% lower plasma levels (P=0.004); variants of both SNPs were also associated with a risk of type 2 diabetes in directions corresponding to their associated sex hormone-binding globulin levels. In mendelian randomization analyses, the predicted odds ratio of type 2 diabetes per standard-deviation increase in the plasma level of sex hormone-binding globulin was 0.28 (95% CI, 0.13 to 0.58) among women and 0.29 (95% CI, 0.15 to 0.58) among men, a finding that suggests that sex hormone-binding globulin may have a causal role in the risk of type 2 diabetes. Low circulating levels of sex hormone-binding globulin are a strong predictor of the risk of type 2 diabetes in women and men. The clinical usefulness of both SHBG genotypes and plasma levels in stratification and intervention for the risk of type 2 diabetes warrants further examination. 2009 Massachusetts Medical Society