Growing evidence indicates that parental smoking is associated with risk of offspring obesity. The purpose of this study was to identify whether parental tobacco smoking during gestation was associated with risk of diabetes mellitus. This is a prospective study of 44- to 54-year-old daughters ( n = 1801) born in the Child Health and Development Studies pregnancy cohort between 1959 and 1967. Their mothers resided near Oakland California, were members of the Kaiser Foundation Health Plan and reported parental tobacco smoking during an early pregnancy interview. Daughters reported physician diagnoses of diabetes mellitus and provided blood samples for hemoglobin A1C measurement. Prenatal maternal smoking had a stronger association with daughters’ diabetes mellitus risk than prenatal paternal smoking, and the former persisted after adjustment for parental race, diabetes and employment (aRR = 2.4 [95% confidence intervals 1.4–4.1] P < 0.01 and aRR = 1.7 [95% confidence intervals 1.0–3.0] P = 0.05, respectively). Estimates of the effect of parental smoking were unchanged when further adjusted by daughters’ birth weight or current body mass index (BMI). Maternal smoking was also significantly associated with self-reported type 2 diabetes diagnosis (2.3 [95% confidence intervals 1.0–5.0] P < 0.05). Having parents who smoked during pregnancy was associated with an increased risk of diabetes mellitus among adult daughters, independent of known risk factors, providing further evidence that prenatal environmental chemical exposures independent of birth weight and current BMI may contribute to adult diabetes mellitus. While other studies seek to confirm our results, caution toward tobacco smoking by or proximal to pregnant women is warranted in diabetes mellitus prevention efforts.