The impact of weight loss intervention on disability-free life expectancy in adults with diabetes is unknown. We examined the impact of a long-term weight loss intervention on years spent with and without physical disability. Overweight or obese adults with type 2 diabetes age 45-76 years ( = 5,145) were randomly assigned to a 10-year intensive lifestyle intervention (ILI) or diabetes support and education (DSE). Physical function was assessed annually for 12 years using the 36-Item Short Form Health Survey. Annual incidence of physical disability, mortality, and disability remission were incorporated into a Markov model to quantify years of life spent active and physically disabled. Physical disability incidence was lower in the ILI group (6.0% per year) than in the DSE group (6.8% per year) (incidence rate ratio 0.88 95% CI 0.81-0.96), whereas rates of disability remission and mortality did not differ between groups. ILI participants had a significant delay in moderate or severe disability onset and an increase in number of nondisabled years ( < 0.05) compared with DSE participants. For a 60-year-old, this effect translates to 0.9 more disability-free years (12.0 years 95% CI 11.5-12.4 vs. 11.1 years 95% CI 10.6-11.7) but no difference in total years of life. In stratified analyses, ILI increased disability-free years of life in women and participants without cardiovascular disease (CVD) but not in men or participants with CVD. Long-term lifestyle interventions among overweight or obese adults with type 2 diabetes may reduce long-term disability, leading to an effect on disability-free life expectancy but not on total life expectancy.