Although people with diabetes comprised only 3% of the U.S. population in 1992, their care cost more than $100 billion, nearly 12% of total U.S. health-care expenditures. In recent years, there has been increasing consensus on appropriate methods for economic analyses, and analyses have been published that have assessed the cost-effectiveness of interventions in diabetes. Unlike many earlier analyses, these have assessed a common outcome, adopted a health system perspective, clearly articulated costs and outcomes, chosen appropriate comparators, discounted both costs and outcomes, and performed appropriate sensitivity analyses. In this report, we review studies that have used common methods to address screening for type 2 diabetes, intensive I therapy for type 1 diabetes, comprehensive therapy for type 2 diabetes, screening and treatment for diabetic retinopathy and nephropathy, treatment of hypertension and dyslipidemia, and treatment of coronary artery disease in diabetes. In general, most interventions in diabetes are cost-effective. Systematic implementation of such interventions can improve outcomes and increase the value achieved with the money spent for diabetes care. (C) 1999 Lippincott Williams & Wilkins, Inc.