OBJECTIVE - To determine whether older women with diabetes have an increased risk of falls and whether known risk factors for falls account for any increased risk. RESEARCH DESIGN AND METHODS - This prospective cohort study included 9,249 women ≥67 years of age enrolled in the Study of Osteoporotic Fractures. Diabetes was determined by questionnaire at baseline. Physical performance was measured at the second examination. Subsequently, falls were ascertained every 4 months by postcard. RESULTS - A total of 629 (6.8%) women had diabetes, including 99 who used insulin. During an average of 7.2 years, 1,640 women (18%) fell more than once a year. Diabetes, stratified by insulin use, was associated with an increased risk of falling more than once a year (age-adjusted odds ratio [OR] 1.68 [95% CI 1.37-2.07] for non-insulin-treated diabetes; age-adjusted OR 2.78 [1.82-4.24] for insulin-treated diabetes). In the first 2 years of follow-up, women with diabetes were not more likely to fall than women without diabetes (44 vs. 42%; P = 0.26), but they had more falls (3.1 vs. 2.4; P < 0.01). Women with diabetes were more likely to have other risk factors for falls, which appeared to account for the increased risk of falls associated with non-insulin-treated diabetes (adjusted OR 1.18 [0.87-1.60]) but not insulin-treated diabetes (adjusted OR 2.76 [1.52-5.01]). CONCLUSIONS - Older women with diabetes have an increased risk of falling, partly because of the increased rates of known fall risk factors, and may benefit from interventions to prevent falls. Further research is needed to determine whether diabetes treatment reduces fall risk.