Diabetes is 7th largest cause of death worldwide, and prevalence is increasing rapidly in low-and middle-income countries. There is an urgent need to develop and test interventions to prevent and control diabetes and develop the theory about how such interventions can be effective. We conducted a participatory learning and action (PLA) intervention with community groups in rural Bangladesh which was evaluated through a cluster randomised controlled trial. There was a large reduction in the combined prevalence of type 2 diabetes and intermediate hyperglycaemia in the PLA group compared with the control group. We present findings from qualitative process evaluation research to explore how this intervention was effective.We conducted group interviews and focus group discussions using photovoice with purposively sampled group attenders and non-attenders, and intervention implementers. Data were collected before the trial analysis. We used inductive content analysis to generate theory from the data.The intervention increased the health literacy of individuals and communities - developing their knowledge, capacity and self-confidence to enact healthy behaviours. Community, household and individual capacity increased through social support and social networks, which then created an enabling community context, further strengthening agency and enabling community action. This increased opportunities for healthy behaviour. Community actions addressed lack of awareness about diabetes, gendered barriers to physical activity and lack of access to blood glucose testing. The interaction between the individual, household, and community contexts amplified change, and yet there was limited engagement with macro level, or 'state', barriers to healthy behaviour.The participatory approach enabled groups to analyse how context affected their ability to have healthy behaviours and participants engaged with issues as a community in the ways that they felt comfortable. We suggest measuring health literacy and social networks in future interventions and recommend specific capacity strengthening to develop public accountability mechanisms and health systems strengthening to complement community-based interventions.Registered at ISRCTN on 30th March 2016 (Retrospectively Registered) Registration number: ISRCTN41083256 .