Chronic low-grade inflammation may be involved in the pathogenesis of insulin resistance and type 2 diabetes. We examined whether a high white blood cell count (WBC), a marker of inflammation, predicts a worsening of insulin action, insulin secretory function, and the development of type 2 diabetes in Pima Indians. We measured WBC in 352 nondiabetic Pima Indians (215 men and 137 women, aged 27 ± 6 years [means ± SD], body fat 32 ± 8%, WBC 8,107 ± 2,022 cells/mm³) who were characterized for body composition (by hydrodensitometry or dual-energy X-ray absorptiometry), glucose tolerance (by 75-g oral glucose tolerance test), insulin action (M; by hyperinsulinemic clamp), and acute insulin secretory response (AIR; by 25-g intravenous glucose challenge). Among 272 subjects who were normal glucose tolerant (NGT) at baseline, 54 developed diabetes over an average follow-up of 5.5 ± 4.4 years. Among those who remained nondiabetic, 81 subjects had follow-up measurements of M and AIR. Cross-sectionally, WBC was related to percent body fat (r = 0.32, P < 0.0001) and M (r = −0.24, P < 0.0001), but not to AIR (r = 0.06, P = 0.4). In a multivariate analysis, when adjusted for age and sex, both percent body fat (P < 0.0001) and M (P = 0.03) were independently associated with WBC. A high WBC value predicted diabetes (relative hazard 90th vs. 10th percentiles [95%CI] of 2.7 [1.3–5.4], P = 0.007) when adjusted for age and sex. The predictive effect of WBC persisted after additional adjustment for established predictors of diabetes, i.e., percent body fat, M, and AIR (relative hazard 2.6 [1.1–6.2], P = 0.03). After adjustment for follow-up duration, a high WBC at baseline was associated with a subsequent worsening of M (P = 0.003), but not a worsening of AIR. A high WBC predicts a worsening of insulin action and the development of type 2 diabetes in Pima Indians. These findings are consistent with the hypothesis that a chronic activation of the immune system may play a role in the pathogenesis of type 2 diabetes.