Background. The effect of sleep on the risk of developing diabetes has not been explored in an Asian population. The objective of this study is to investigate the effect of self-reported sleep duration and sleep quality on the risk of developing diabetes in a prospective cohort in Japan. Methods. Data were analyzed from the cohort of participants in a High-risk and Population Strategy for Occupational Health Promotion Study (HIPOP-OHP), conducted in Japan from the year 1999 until 2004. A Cox proportional hazard model was used to evaluate the association between sleep duration or sleep quality and the risk of diabetes. Results. Of 6509 participants (26.1% of women, 19-69 years of age), a total of 230 type 2 diabetes cases were reported over a median 4.2 years of follow-up. For participants who often experienced difficulty in initiating sleep, the multivariate-adjusted hazard ratios for diabetes were 1.42 (95%CI, 1.05-1.91) in participants with a medium frequency of difficulty initiating sleep, and 1.61 (95%CI, 1.00-2.58) for those with a high frequency, with a statistically significant linear trend. Significant association was not observed in the association between difficulty of maintaining sleep or duration of sleep, and risk of diabetes. Conclusion. Medium and high frequencies of difficulty initiating sleep, but not difficulty in maintaining sleep or in sleep duration, are associated with higher risks of diabetes in relatively healthy Asian workers, even after adjusting for a large number of possible further factors.