The authors examined the associations of observed neighborhood (block face) and housing conditions with the incidence of diabetes by using data from 644 subjects in the African-American Health Study (St. Louis area, Missouri). They also investigated five mediating pathways (health behavior, psychosocial, health status, access to medical care, and sociodemographic characteristics) if significant associations were identified. The external appearance of the block the subjects lived on and housing conditions were rated as excellent, good, fair, or poor. Subjects reported about neighborhood desirability. Self-reported diabetes was obtained at baseline and 3 years later. Of 644 subjects without self-reported diabetes, 10.3% reported having diabetes at the 3-year follow-up. Every housing condition rated as fair-poor was associated with an increased risk of diabetes, with odds ratios ranging from 2.53 (95% confidence interval: 1.47, 4.34 for physical condition inside the building) to 1.78 (95% confidence interval: 1.03, 3.07 for cleanliness inside the building) in unadjusted analyses. No association was found between any of the block face conditions or perceived neighborhood conditions and incident diabetes. The odds ratios for the five housing conditions were unaffected when adjusted for the mediating pathways. Poor housing conditions appear to be an independent contributor to the risk of incident diabetes in urban, middle-aged African Americans.