Aims: Type 2 diabetes and associated microvascular abnormalities are postulated to affect hearing. Our study reports on the relationship between Type 2 diabetes and the prevalence, 5-year incidence and progression of hearing impairment in a representative, older, Australian population. Methods: The Blue Mountains Hearing Study is a population-based survey of age-related hearing loss conducted in a defined suburban area, west of Sydney. Hearing loss was defined as the pure-tone average of frequencies 0.5, 1.0, 2.0 and 4.0 kHz > 25 decibels hearing level (dB HL) in the better ear (bilateral hearing loss). Type 2 diabetes was defined from reported physician-diagnosed diabetes or fasting blood glucose ≥ 7.0 mmol/l. Results: Age-related hearing loss was present in 50.0% of diabetic participants (n = 210) compared with 38.2% of non-diabetic participants (n = 1648), odds ratio (OR) 1.55 [95% confidence interval (CI) 1.11-2.17], after adjusting for multiple risk factors. A relationship of diabetes duration with hearing loss was also demonstrated. After 5 years, incident hearing loss occurred in 18.7% of participants with, and 18.0% of those without diabetes, adjusted OR 1.01 (CI 0.54-1.91). Progression of existing hearing loss (> 5 dB HL), however, was significantly greater in participants with newly diagnosed diabetes (69.6%) than in those without diabetes (47.8%) over this period, adjusted OR 2.71 (CI 1.07-6.86). Conclusions: Type 2 diabetes was associated with prevalent, but not incident hearing loss in this older population. Accelerated hearing loss progression over 5 years was more than doubled in persons newly diagnosed with diabetes. These data explore further reported links between Type 2 diabetes and age-related hearing loss.