An argument for the existence of gods given by the Stoic Diogenes of Babylon and reported by Sextus Empiricus appears to be an ancient version of the ontological argument. In this paper I present a new reconstruction of Diogenes' argument that differs in certain important respects from the reconstruction presented by Jacques Brunschwig. I argue that my reconstruction makes better sense of how Diogenes' argument emerged as a response to an attack on an earlier Stoic argument presented by Zeno of Citium. Diogenes' argument as reconstructed here is an example of a modal ontological argument that makes use of the concept of being of such a nature as to exist. I argue that this concept is a modal concept that is based on the Philonian definition of possibility, and thus that Diogenes' argument is a source of important evidence about the use of non-Stoic modalities in the post-Chrysippean Stoa. I conclude by arguing that the objections made against considering Diogenes' argument as ontological are unfounded and that Diogenes' argument clearly resembles modern versions of modal ontological arguments.