To compare impact of incident diabetes on atherosclerotic cardiovascular disease (ASCVD) risk among postmenopausal women according to statin use. Prospective data from 120,499 postmenopausal women without prevalent diabetes or cardiovascular disease at baseline from the Women's Health Initiative were used. Incident diabetes was self-reported annually and defined as treatment with pills or injectable medication for diabetes. Current statin use was determined at enrollment and years 1, 3, 6, 9 and 13.5 in the three clinical trial arms, and at baseline, year 3, and 13.5 for the observational study. The primary outcome was incident ASCVD events, self-reported annually and adjudicated by blinded local and central physicians. Incident diabetes and statin use status were fitted as time-varying covariates in Cox regression models to assess ASCVD risk during an average follow-up of 13.6 years. For those not on statins at the time of diabetes diagnosis, there was a 42 % increased risk of ASCVD [hazard ratio (HR) 1.42, 95 % CI 1.28-1.58] among women with incident diabetes versus those without diabetes. Among women on statins, there was a 39 % increased risk of ASCVD (HR 1.39, 95 % CI 1.12-1.74) in women with incident diabetes versus those without diabetes. The increased ASCVD risk due to diabetes was similar between women before or after initiating statins (P = 0.89). Whether diabetes was diagnosed before or after statin use did not alter the increased risk of ASCVD associated with diabetes. Mitigating the increased incidence of diabetes in statin users could increase the ASCVD benefit-to-risk ratio of statins.