Context: Black adults experience more type 2 diabetes mellitus and higher inflammatory markers, including C-reactive protein (CRP), than White adults. Inflammatory markers are associated with risk of incident diabetes but the impact of inflammation on racial differences in incident diabetes is unknown. Objective: We assessed whether CRP mediated the Black-White incident diabetes disparity. Methods: The REasons for Geographic And Racial Differences in Stroke (REGARDS) study enrolled 30 239 US Black and White adults aged ≥45 years in 2003-2007 with a second visit approximately 10 years later. Among participants without baseline diabetes, adjusted sex- and race-stratified risk ratios for incident diabetes at the second visit by CRP level were calculated using modified Poisson regression. Inverse odds weighting estimated the percent mediation of the racial disparity by CRP. Results: Of 11 073 participants without baseline diabetes (33% Black, 67% White), 1389 (12.5%) developed diabetes. Black participants had higher CRP at baseline and greater incident diabetes than White participants. Relative to CRP < 3 mg/L, CRP ≥ 3 mg/L was associated with greater risk of diabetes in all race-sex strata. Black participants had higher risk of diabetes at CRP < 3 mg/L, but not at CRP ≥ 3 mg/L. In women, CRP mediated 10.0% of the racial difference in incident diabetes. This mediation was not seen in men. Conclusion: Higher CRP is a risk factor for incident diabetes, but the excess burden of diabetes in Black adults was only seen in those with lower CRP, suggesting that inflammation is unlikely to be the main driver of this racial disparity.