OBJECTIVE: Observational studies indicate that moderate levels of alcohol consumption may reduce the risk of type 2 diabetes. In addition to providing an updated summary of the existing literature, this meta-analysis explored whether reductions in risk may be the product of misclassification bias. RESEARCH DESIGN AND METHODS: A systematic search was undertaken, identifying studies that reported a temporal association between alcohol consumption and the risk of type 2 diabetes. No restrictions were placed upon the language or date of publication. Non-English publications were, where necessary, translated using online translation tools. Models were constructed using fractional polynomial regression to determine the best-fitting dose-response relationship between alcohol intake and type 2 diabetes, with a priori testing of sex and referent group interactions. RESULTS: Thirty-eight studies met the selection criteria, representing 1,902,605 participants and 125,926 cases of type 2 diabetes. A conventional noncurrent drinking category was reported by 33 studies, while five reported a never-drinking category. Relative to combined abstainers, reductions in the risk of type 2 diabetes were present at all levels of alcohol intake <63 g/day, with risks increasing above this threshold. Peak risk reduction was present between 10-14 g/day at an 18% decrease in hazards. Stratification of available data revealed that reductions in risk may be specific to women only and absent in studies that adopted a never-drinking abstention category or sampled an Asian population region. CONCLUSIONS: Reductions in risk among moderate alcohol drinkers may be confined to women and non-Asian populations. Although based on a minority of studies, there is also the possibility that reductions in risk may have been overestimated by studies using a referent group contaminated by less healthy former drinkers.