Single nucleotide polymorphisms (SNPs) in the fat mass and obesity associated (FTO) gene are associated with body mass index (BMI) in populations of European descent. The FTO rs9939609 variant, first detected in a genome-wide association study of diabetes, conferred an increased disease risk that was abolished after adjustment for BMI, suggesting that the association may be due to variation in adiposity. The relationship between diabetes, four previously identified FTO polymorphisms that span a 19.6-kb genomic region, and obesity was therefore evaluated in the biracial population-based Atherosclerosis Risk in Communities Study with the goal of further refining the association by comparing results between the two ethnic groups. The prevalence of diabetes and obesity (BMI ≥30 kg/m2) was established at baseline, and diabetes was determined by either self-report, a fasting glucose level ≥126 mg/dL, or non-fasting glucose ≥200 mg/dL. There were 1,004 diabetes cases and 10,038 non-cases in whites, and 670 cases and 2,780 non-cases in African-Americans. Differences in mean BMI were assessed by a general linear model, and multivariable logistic regression was used to predict the risk of diabetes and obesity. For white participants, the FTO rs9939609 A allele was associated with an increased risk of diabetes (odds ratio (OR) = 1.19, p<0.001) and obesity (OR = 1.22, p<0.001) under an additive genetic model that was similar for all of the SNPs analyzed. In African-Americans, only the rs1421085 C allele was a determinant of obesity risk (OR = 1.17, p = 0.05), but was found to be protective against diabetes (OR = 0.79, p = 0.03). Adjustment for BMI did not eliminate any of the observed associations with diabetes. Significant statistical interaction between race and the FTO variants suggests that the effect on diabetes susceptibility may be context dependent.