OBJECTIVE: To estimate and compare associations of alanine aminotransferase (ALT) and gamma-glutamyltransferase (GGT) with incident diabetes. RESEARCH DESIGN AND METHODS: ALT and GGT were studied as determinants of diabetes in the British Women's Heart and Health Study, a cohort of 4,286 women 60-79 years old (median follow-up 7.3 years). A systematic review and a meta-analysis of 21 prospective, population-based studies of ultrasonography, which diagnosed nonalcoholic fatty liver disease (NAFLD), ALT, and GGT as determinants of diabetes, were conducted, and associations of ALT and GGT with diabetes were compared. RESULTS: Ultrasonography-diagnosed NAFLD was associated with more than a doubling in the risk of incident diabetes (three studies). ALT and GGT both predicted diabetes. The fully adjusted hazard ratio (HR) for diabetes per increase in one unit of logged ALT was 1.83 (95% CI 1.57-2.14, I(2) = 8%) and for GGT was 1.92 (1.66-2.21, I(2) = 55%). To directly compare ALT and GGT as determinants of diabetes, the fully adjusted risk of diabetes in the top versus bottom fourth of the ALT and GGT distributions was estimated using data from studies that included results for both markers. For ALT, the HR was 2.02 (1.59-2.58, I(2) = 27%), and for GGT the HR was 2.94 (1.98-3.88, I(2) = 20%), suggesting that GGT may be a better predictor (P = 0.05). CONCLUSIONS: Findings are consistent with the role of liver fat in diabetes pathogenesis. GGT may be a better diabetes predictor than ALT, but additional studies with directly determined liver fat content, ALT, and GGT are needed to confirm this finding.