Type 2 DM is associated with high rates of morbidity and premature mortality. Various potential health effects of coffee have been extensively studied, but data on habitual coffee consumption and the risk of type 2 diabetes mellitus have only recently been published. We systematically reviewed cohort studies (identified after searching through MEDLINE) from the period of January 2001 to August 2011 to find out the relation of degree of coffee consumption with development of diabetes mellitus. Information on study design, participant characteristics, measurement of coffee consumption and outcomes, adjustment for potential confounders, and estimates of associations was reviewed independently by 3 reviewers. The review included 13 cohort studies including 12, 47,387 participants and 9473 incident cases of type 2 diabetes. We compared the risk of diabetes amongst people with different degrees of coffee consumption. We concluded that habitual coffee consumption is associated with a lower risk of type 2 diabetes. Participants who drank 4 to 6 cups and more than 6 to 7 cups of coffee per day had a lower risk of type 2 diabetes compared with those who drank less than 2 cups per day. Advantage of filtered coffee over pot boiled, decaffeinated coffee over caffeinated coffee and stronger inverse correlation in < 60 years age group was also noted. However, based on this review, increasing coffee consumption as a public health strategy can't be recommended. More detailed studies of coffee consumption, including appropriate measures of postprandial hyperglycemia and insulin sensitivity, are required.