Objective Stress induced hyperglycemia occurs in critically ill patients who have normal glucose tolerance following resolution of their acute illness. The objective was to evaluate the association between stress induced hyperglycemia and incident diabetes in survivors of critical illness. Design Retrospective cohort study. Setting All adult patients surviving admission to a public hospital intensive care unit (ICU) in South Australia between 2004 and 2011. Patients Stress induced hyperglycemia was defined as a blood glucose ≥ 11.1 mmol/L (200 mg/dL) within 24 hours of ICU admission. Prevalent diabetes was identified through ICD-10 coding or prior registration with the Australian National Diabetes Service Scheme (NDSS). Incident diabetes was identified as NDSS registration beyond 30 days after hospital discharge until July 2015. The predicted risk of developing diabetes was described as sub-hazard ratios using competing risk regression. Survival was assessed using Cox proportional hazards regression. Main Results Stress induced hyperglycemia was identified in 2,883 (17%) of 17,074 patients without diabetes. The incidence of type 2 diabetes following critical illness was 4.8% (821 of 17,074). The risk of diabetes in patients with stress induced hyperglycemia was approximately double that of those without (HR 1.91 (95% CI 1.62, 2.26), p<0.001) and was sustained regardless of age or severity of illness. Conclusions Stress induced hyperglycemia identifies patients at subsequent risk of incident diabetes.