We investigate associations between a diabetes diagnosis and financial and instrumental transfers between parents and adult children. Data are from the Panel Study of Income Dynamics, a nationally representative household cohort from the USA with prospective data on diabetes and cross-sectional data on transfers for households in which the head and partner had adult children (n = 4210) or surviving parents (n = 6930). We used survey-adjusted multivariate logistic regressions to compare the probabilities of receiving and giving intergenerational transfers in households where the head and/or partner were recently diagnosed with diabetes or had diabetes-related limitations in daily activities. Households with a diabetes diagnosis in the previous 2 years were less likely than those without diabetes to give money to adult children (OR = 0.46, p < 0.01). While recent onset of diabetes was not consistently associated with receiving transfers, transfers were more likely with progressing disease: households in which the head or partner had been diagnose more than 5 years earlier were more likely to receive instrumental help from an adult child (OR = 1.24; p < 0.05); those with diabetes-related limitations were more likely to receive assistance, especially instrumental help from adult children (OR = 1.43; p < 0.01) than households without diabetes. The onset of a chronic health condition affects not only individuals' own health and financial wellbeing; it also has implications for their adult children and parents, for family relations, time allocation, and financial resources. These broader implications of chronic disease may perpetuate health and economic inequalities across generations.