Importance: Differences in readmission rates among racial and ethnic minorities have been reported, but data among people with diabetes are lacking despite the high burden of diabetes and its complications in these populations. Objectives: To examine racial/ethnic differences in all-cause readmission among US adults with diabetes and categorize patient- and system-level factors associated with these differences. Design, Setting, and Participants: This retrospective cohort study includes 272 758 adult patients with diabetes, discharged alive from the hospital between January 1, 2009, and December 31, 2014, and stratified by race/ethnicity. An administrative claims data set of commercially insured and Medicare Advantage beneficiaries across the United States was used. Data analysis took place between October 2016 and February 2019. Main Outcomes and Measures: Unplanned all-cause readmission within 30 days of discharge and individual-, clinical-, economic-, index hospitalization-, and hospital-level risk factors for readmission. Results: A total of 467 324 index hospitalizations among 272 758 adults with diabetes (mean [SD] age, 67.7 [12.7]; 143 498 [52.6%] women) were examined. The rates of 30-day all-cause readmission were 10.2% (33 683 of 329 264) among white individuals, 12.2% (11 014 of 89 989) among black individuals, 10.9% (4151 of 38 137) among Hispanic individuals, and 9.9% (980 of 9934) among Asian individuals (P < .001). After adjustment for all factors, only black patients had a higher risk of readmission compared with white patients (odds ratio, 1.05; 95% CI, 1.02-1.08). This increased readmission risk among black patients was sequentially attenuated, but not entirely explained, by other demographic factors, comorbidities, income, reason for index hospitalization, or place of hospitalization. Compared with white patients, both black and Hispanic patients had the highest observed-to-expected (OE) readmission rate ratio when their income was low (annual household income <$40 000 among black patients: OE ratio, 1.11; 95% CI, 1.09-1.14; among Hispanic patients: OE ratio, 1.11; 95% CI, 1.07-1.16) and when they were hospitalized in nonprofit hospitals (black patients: OE ratio, 1.10; 95% CI, 1.08-1.12; among Hispanic patients: OE ratio, 1.08; 95% CI, 1.05-1.12), academic hospitals (black patients: OE ratio, 1.16; 95% CI, 1.13-1.20; Hispanic patients: OE ratio, 1.12; 95% CI, 1.06-1.19), or large hospitals (ie, with ≥400 beds; black patients: OE ratio, 1.11; 95% CI, 1.09-1.14; Hispanic patients: OE ratio, 1.09; 95% CI, 1.04-1.14). Conclusions and Relevance: In this study, black patients with diabetes had a significantly higher risk of readmission than members of other racial/ethnic groups. This increased risk was most pronounced among lower-income patients hospitalized in nonprofit, academic, or large hospitals. These findings reinforce the importance of identifying and addressing the many reasons for persistent racial/ethnic differences in health care quality and outcomes.