Diabetes is associated with lower extremity dysfunction. Sarcopenia, a geriatric syndrome that indicates loss of muscle mass and strength, is also associated with lower extremity dysfunction. Sarcopenia may be more prevalent among diabetic older adults. Peripheral nerve dysfunction (PND) has been suggested as a mechanistic cause of sarcopenia. This relationship between PND and sarcopenia has not been examined longitudinally in any cohort. Additionally, research has not examined the association between diabetes, sarcopenia, and lower extremity function (LEF) longitudinally. The specific aims of this study were to: 1) Examine the prevalence of sarcopenia among a US population of diabetic and non-diabetic older adults, and effect modification of sex and race, using multivariable logistic regression; 2) Examine the relationship between PND and sarcopenia among diabetic and non-diabetic older adults over time and determine if race and sex modify the relationship using generalized estimating equations; 3) Identify the relationship of PND and sarcopenia on LEF among diabetic compared to non-diabetic older adults, and examine if race or sex modify the relationship, using generalized linear models. A secondary analysis of the Health, Aging, and Body Composition (Health ABC) study (1997-2008) was conducted on 2388 (1884 non diabetics and 504 diabetics) community-dwelling black (932) and white (1456) individuals aged 70 years and older, over study years 1-11. Diabetes was determined from blood glucose, use of antidiabetic medications, and/or self-report of a previous diagnosis. Sarcopenia classification was based on DXA-measured appendicular lean mass normalized for height, and grip strength. LEF was measured by gait speed. Sarcopenia prevalence was lower for diabetics than non-diabetics older adults. Adjusting for covariates, neither diabetes nor PND were associated with increased prevalence of sarcopenia. Sarcopenia prevalence was significantly associated with a slower gait speed over time. Sex and race did not modify any of the relationships. Our findings indicate that diabetes is not predictive of sarcopenia prevalence over time; however sarcopenia is predictive of slower gait speed. Further refinement of the definition of sarcopenia may be necessary to account for muscle quality, specifically fat infiltration, which may exist among diabetic older adults. quality, specifically fat infiltration, which may exist among diabetic older adults.