The role of dietary fat in the etiology of type 2 diabetes remains uncertain. The authors investigated the association between dietary fat composition and risk of clinical type 2 diabetes in the European Prospective Investigation of Cancer-Norfolk study and identified food consumption patterns associated with dietary fat composition. Diet was assessed at baseline (1993–1997) using a semiquantitative food frequency questionnaire. From multiple sources of information, 414 incident cases of diabetes were identified among 23,631 men and women aged 40–78 years during 3–7 years of follow-up. The capture-recapture ascertainment level was 99%. The energy-adjusted dietary polyunsaturated:saturated fat ratio was inversely associated with the risk of diabetes (odds ratio (OR) = 0.84 per standard deviation change, 95% confidence interval (CI): 0.75, 0.94). Adjustment for age, sex, family history of diabetes, smoking, physical activity, total fat, protein, and alcohol attenuated the association (OR = 0.88, 95% CI: 0.78, 0.99), and it was no longer statistically significant after including body mass index and the waist:hip ratio (OR = 0.91, 95% CI: 0.81, 1.03). This prospective study showed that an increased dietary polyunsaturated:saturated fat ratio was associated with a reduced risk of diabetes, independent of age, sex, family history of diabetes, and other lifestyle factors.