CONTEXT: The relations between dietary and/or circulating levels of fatty acids and the development of type 2 diabetes is unclear. Protective associations with the marine omega-3 fatty acids and linoleic acid, and with a marker of fatty acid desaturase activity delta-5 desaturase (D5D ratio) have been reported, as have adverse relations with saturated fatty acids and D6D ratio. OBJECTIVE: To determine the associations between red blood cell (RBC) fatty acid distributions and incident type 2 diabetes. DESIGN: Prospective observational cohort study nested in the Women's Health Initiative Memory Study. SETTING: General population. SUBJECTS: Postmenopausal women. MAIN OUTCOME MEASURES: Self-reported incident type 2 diabetes. RESULTS: There were 703 new cases of type 2 diabetes over 11 years of follow up among 6379 postmenopausal women. In the fully adjusted models, baseline RBC D5D ratio was inversely associated with incident type 2 diabetes [Hazard Ratio (HR) 0.88, 95% confidence interval (CI) 0.81-0.95) per 1 SD increase. Similarly, baseline RBC D6D ratio and palmitic acid were directly associated with incident type 2 diabetes (HR 1.14, 95% CI 1.04-1.25; and HR 1.24, 95% CI 1.14-1.35, respectively). None of these relations were materially altered by excluding incident cases in the first two years of follow-up. There were no significant relations with eicosapentaenoic, docosahexaenoic or linoleic acids. CONCLUSIONS: Whether altered fatty acid desaturase activities or palmitic acid levels are causally related to the development of type 2 diabetes cannot be determined from this study, but our findings suggest that proportions of certain fatty acids in RBC membranes are associated with risk for type 2 diabetes.