The objectives of this study were to examine the contribution of socioeconomic status (SES) on incident impaired glucose metabolism and type 2 diabetes and to study the mediating role of health behaviours on this relationship. The study population were participants from the Australian Diabetes Obesity and Lifestyle Study (AusDiab), which is a national, population-based, longitudinal study of adults aged 25 years and above. The total sample for this study included 4,405 individuals with a 5-year follow-up. Results showed an inverse relationship between SES and diabetes incidence. Among all the SES variables (education, total household income and occupational grade), education emerged as a predictor for incident impaired glucose tolerance (IGT) and type 2 diabetes, whereas income and occupational grade did not. Higher levels of education were associated with lower rates of smoking and increased physical activity, and associated with improved diet quality and reduced sedentary behaviours. People who developed type 2 diabetes were more likely to smoke and be physically inactive and have poor diet quality. Smoking and physical activity attenuated the impact of SES on IGT and type 2 diabetes. These results indicated an effect of SES on the development of IGT and diabetes but did not significantly predict impaired fasting glucose.