Background: Longitudinal studies examining the risk of depressive and anxiety disorders associated with diabetes are limited. This study examined the association between diabetes and the risk of depressive and anxiety disorders in Australian women using longitudinal data. Methods: Data were from a sample of women who were part of an Australian pregnancy and birth cohort study. Data comprised self-reported diabetes mellitus and the subsequent reporting of depressive and anxiety disorders. Mood disorders were assessed according to the Diagnostic and Statistical Manual of Mental Disorders, fourth edition, obtained from participants using Composite International Diagnostic Interview (CIDI)-Auto (WHO WMH-CIDI CAPI, version 21.1.3). Multiple regression models with adjustment for important covariates were used. Results: Women with diabetes had a higher lifetime prevalence of any depressive and/or anxiety disorder than women without diabetes. About 3 in 10 women with diabetes experienced a lifetime event of any depressive disorder, while 1 in 2 women with diabetes experienced a lifetime event of any anxiety disorder. In prospective analyses, diabetes was only significantly associated with a 30-day episode of any anxiety disorder (odds ratio [OR] 1.53, 95% confidence interval [CI] 1.09-2.15). In the case of lifetime disorders, diabetes was significantly associated with any depressive disorder (OR 1.37, 95% CI 1.03-1.84), major depressive disorder (OR 1.36, 95% CI 1.01-1.85), and posttraumatic stress disorder (OR 1.42, 95% CI 1.01-2.02). Conclusions: The findings suggest that the presence of diabetes is a significant risk factor for women experiencing current anxiety disorders. However, in the case of depression, the association with diabetes only held for women who had experienced past episodes, there was no association with current depression. This suggests that the evidence is not strong enough to support a direct effect of diabetes as a cause of mood disorders.