OBJECTIVES: To confirm or refute a possible association between intense Topical Corticosteroid (TC) use and new-onset diabetes and establish whether it increases with dose and duration of TC use. METHODS: Data for this nested case-control study were obtained from the PHARMO Record Linkage System, including among others linked drug-dispensing and hospital records of approximately three million individuals in defined areas of the Netherlands. Users of TC during 1992-2004, without diabetes, with = 4 years of follow-up were selected. Diabetes onset was defined as first occurrence (index date) of an antidiabetic drug dispensing or hospitalization for diabetes or diabetes-related diagnoses. Each case was matched by age and sex to 4 controls without diabetes, with similar follow-up duration. Use of TC and systemic corticosteroids (SC) and/or inhaled corticosteroids (IC) as co medication were classified as current (= 2 years before index date), recent (4-2 years ago) and past/never (>4 years ago). Multivariate regression adjusted for co-medication and co-morbidity. RESULTS: Among 192,893 incident TC users, 2,212 developed diabetes and could be matched to 8,582 controls. Current TC use was associated with a 1.24 times increased risk of diabetes (95% CI 1.11-1.40). The Odds Ratio increased to 1.32 with >180 days of TC use and to 1.44 with a cumulative TC load (combined potency and units) 731-1,460 mg. Cases more often used SC and IC than controls (23% versus 17% and 18% versus 13% respectively). Among “Past/never” users of SC and/or IC, risk of diabetes with current TC use was 1.25 (95% CI 1.09-1.43); among “Current” users of SC and/or IC, this OR was 1.13 (95%CI 0.88 1.44). CONCLUSION: A statistically significant effect of TC use on diabetes was found. Use of TC as skin treatment among patients at increased risk of diabetes should be considered with some caution.