We investigated the association of the levels of ketone bodies (KBs) with hyperglycemia and with 62 genetic risk variants regulating glucose levels or type 2 diabetes in the population-based Metabolic Syndrome in Men (METSIM) study, including 9,398 Finnish men without diabetes or newly diagnosed type 2 diabetes. Increasing fasting and 2-h plasma glucose levels were associated with elevated levels of acetoacetate (AcAc) and β-hydroxybutyrate (BHB). AcAc and BHB predicted an increase in the glucose area under the curve in an oral glucose tolerance test, and AcAc predicted the conversion to type 2 diabetes in a 5-year follow-up of the METSIM cohort. Impaired insulin secretion, but not insulin resistance, explained these findings. Of the 62 single nucleotide polymorphisms associated with the risk of type 2 diabetes or hyperglycemia, the glucose-increasing C allele of GCKR significantly associated with elevated levels of fasting BHB levels. Adipose tissue mRNA expression levels of genes involved in ketolysis were significantly associated with insulin sensitivity (Matsuda index). In conclusion, high levels of KBs predicted subsequent worsening of hyperglycemia, and a common variant of GCKR was significantly associated with BHB levels.