Objective-To examine whether socioeconomic status (SES) explains differences in the prevalence of type 2 diabetes between African-American and non-Hispanic white women and men. Design-Cross sectional study of diabetes prevalence, SES, and other risk factors ascertained by physical examination and interview. Setting-Interviews were conducted in subjects' homes; physical examinations were conducted in mobile examination centres. Participants-961 African-American women, 1641 non-Hispanic white women, 839 African-American men and 1537 non-Hispanic white men, aged 40 to 74 years, examined in the Third National Health and Nutrition Examination Survey (NHANES III), a representative sample of the non-institutionalised civilian population of the United States, 1988-1994. Main results-Among women, African-American race/ethnicity was associated with an age adjusted odds ratio of 1.76 (95% confidence intervals 1.21, 2.57), which was reduced to 1.42 (95% confidence intervals 0.95, 2.13) when poverty income ratio was controlled. Controlling for education or occupational status had minimal effects on this association. When other risk factors were controlled, race/ ethnicity was not significantly associated with type 2 diabetes prevalence. Among men, the age adjusted odds ratio associated with African-American race/ ethnicity was 1.43 (95% confidence intervals 1.03, 1.99). Controlling for SES variables only modestly affected the odds ratio for African/American race/ethnicity among men, while adjusting for other risk factors increased the race/ethnic differences. Conclusions-Economic disadvantage may explain much of the excess prevalence of type 2 diabetes among African-American women, but not among men.