Background: Sugar-sweetened beverages (SSBs) have been associated with an increased risk of diabetes mellitus (DM), whereas the association with artificially sweetened beverages (ASBs) is unclear. Objective: We aimed to evaluate the associations of ASB and SSB consumption with the risk of developing DM and the potential benefit of replacing SSBs with ASBs or water. Design: The national Women's Health Initiative recruited a large prospective cohort of postmenopausal women between 1993 and 1998. ASB, SSB, and water consumption was measured by lifestyle questionnaires, and DM was self-reported. Results: Of 64,850 women, 4675 developed diabetes over an average of 8.4 y of follow-up. ASBs and SSBs were both associated with an increased risk of DM with an HR of 1.21 (95% CI: 1.08, 1.36) comparing ASB consumption of ≥2 serving/d to never or <3 serving/mo, and an HR of 1.43 (95% CI: 1.17, 1.75) comparing SSB consumption of ≥2 serving/d to <1 serving/wk (1 serving = one 12-ounce can or 355 mL). Subgroup analysis found an increased risk of DM associated with ASBs only in the obese group. Modeling the substitution of SSBs with an equal amount of ASBs did not significantly reduce the risk of developing DM. However, statistically substituting 1 serving of ASBs with water was associated with a significant risk reduction of 5% (HR: 0.95; 95% CI: 0.91, 0.99), whereas substituting 1 serving of SSBs with water was associated with a risk reduction of 10% (HR: 0.90; 95% CI: 0.85, 0.95). Conclusions: ASBs were associated with a 21% increased risk of developing DM, approximately half the magnitude of SSBs (associated with a 43% increased risk). Replacing ASBs and SSBs with water could potentially reduce the risk. However, caution should be taken in interpreting these results as causal because both residual confounding and reverse causation could explain these results.