OBJECTIVE Treatment of patients with diabetes often falls short of recommended process and outcome guidelines. To improve the quality of the provided diabetes care, a program (the Comprehensive Diabetes Care Service [CDCS]) using a computerizing tracking and recall system in conjunction with nurses following protocols was implemented in a managed care setting. The impact of this program was studied and compared to the care provided to patients in another managed care setting. RESEARCH DESIGN AND METHODS Patients followed in the CDCS who completed a diabetes education course were compared with patients followed in a group model health maintenance organization (GMH) who also completed a diabetes education course. CDCS patients received routine care in the program. GMH patients came to the CDCS yearly to have a diabetes evaluation. A chart review was also performed on their GMH outpatient records. RESULTS Initial HbA1c levels were higher in the CDCS group than in the GMH group (median of 11.9 vs. 10.0%). In the CDCS patients, HbA1c levels not only fell significantly but were also significantly lower (P < 0.05) than in the GMH patients during the 2nd and 3rd year of follow-up care. There were no significant changes in HbA1c levels in the GMH patients. When CDCS patients were divided into compliant and noncompliant patients, the median HbA1c levels in compliant patients was 8.2%, compared with 11.5% in the noncompliant group. The CDCS patients who needed treatment for hypercholesterolemia were more likely to have a lowering of their cholesterol levels than the GMH patients. All process measures, such as yearly measurement of HbA1c levels, lipid levels, and foot and retinal exams, occurred much more frequently in the CDCS patients. CONCLUSIONS The system developed and implemented for managing diabetes improved both outcome and process measures. The comparison group, followed at another managed care setting, received the care consistent with the average (suboptimal) quality of care provided to patients with diabetes in the U.S. Therefore, by using innovative systems of management, the treatment of patients with diabetes can be greatly improved.