Associations of type 2 diabetes with exposure to polycyclic aromatic hydrocarbons and reduced lung function have been reported. The aim of the present study was to investigate effect of reduced lung function and exposure to background PAHs on diabetes. A total of 2730 individuals were drawn from the Wuhan-Zhuhai (WHZH) Cohort Study (n=3053). Participants completed physical examination, measurement of lung function and urinary monohydroxylated polycyclic aromatic hydrocarbons (OH-PAHs). Risk factors for type 2 diabetes were identified by multiple logistic regression analysis, and the presence of additive interaction between levels of urinary OH-PAHs and lower lung function was evaluated by calculation of the relative excess risk due to interaction (RERI) and attributable proportion due to interaction (AP). Urinary OH-PAHs levels was positively associated with type 2 diabetes among individuals with impaired lung function (p<0.05). Forced expiratory volume in one second (FEV1, odd ratio (OR): 0.664, 95% confidence interval (CI): 0.491–0.900) and forced vital capacity (FVC, OR: 0.693, 95% CI: 0.537–0.893) were negatively associated with diabetes among individuals. Additive interaction of higher urinary levels of OH-PAHs and lower FVC (RERI: 0.679, 95% CI: 0.120–1.238); AP: 0.427, 95% CI: 0.072–0.782) was associated with diabetes. Exposure to background PAHs was related to diabetes among individuals with lower lung function. Urinary levels of OH-PAHs and reduced lung function had an additive effect on diabetes.