Recent research suggests that direct medical costs and quality of life in diabetes depends on number of diabetes-related complications. OBJECTIVES: To analyze relationships of Quality Of Life and medical costs with clinical characteristics of diabetes mellitus patients. METHODS: A retrospective longitudinal cost of care study was conducted; Type 1 and 2 diabetic patients accessing at 2 hospitals in the north-east area of Italy were recruited between October 2008 and March 2009. At enrollment data on demographic, clinical status and QoL (EQ-5D) were collected. Information on costs occurring during the previous two years was obtained from a chart review: hospitalizations, specialist medical visits, diagnostic examinations, drugs and the main clinical parameters. Costs were quantified from the National Health Service (NHS), by applying tariffs and prices valid in 2009. Data were analyzed with a multivariable linear regression model. RESULTS: A total of 411 valid patients (mean+SD age=64.1+12.7, 56.5% male) were enrolled: 15.9% had Type 1, 83.4% Type 2 diabetes and 0.7% had other type of diabetes. Costs were on average €234.36/patient-month; hospitalization accounted for the greatest proportion of costs (58.5%), followed by pharmacological therapies (32.6%) and diagnostic exams (8.9%). With EQ-5D: VAS was on average+SD=67.74±16.71. Both Costs and HRQoL showed a linear positive (costs) and negative (HRQoL) relationship with number of diabetes related complications (diabetic retinopathy, diabetic nephropathy, diabetic neuropathy, ischemic cardiopathy, vascular diseases, and diabetic foot), adjusting for age and gender and type of diabetes. On the contrast, no relationship was found with  type of complications. CONCLUSIONS: Long-term complications carry a considerable impact on medical cost and HRQoL. Although apparently costly, strategies aimed to optimize the prevention of the onset of diabetic complications should be considered as a potential investment to gain health and reduce costs in the long run.