Objective: To evaluate the prevalence of noncompliance with American Diabetes Association (ADA) guidelines for prevention and management of diabetes complications and its association with diabetes-related burden. Methods: California Medicaid administrative data from 2002 through 2004 were used to identify patients ¡Ý40 years of age with a diagnosis of type 2 diabetes mellitus (T2DM) or a prescription for one anti-diabetic medication. Patients who did not have two glycosylated hemoglobin (HbA1c) tests, one eye exam, and one low-density lipoprotein-cholesterol (LDL-C) test at year 2004 were identified as noncompliant with ADA guidelines. Disease burden was defined as any inpatient or emergency room visit. Logistic regressions were used to identify factors associated with disease burden in 2004. Results: Of 29,307 individuals who were identified as T2DM, 12,293(42%) were noncompliant with ADA guidelines, 26,649(91%) did not have two HbA1c tests, 13,315(45%) did not have an eye examination, and 23,765(81%) did not have an LDL-C test. Of the 22,699(77%) patients who filled at least an anti-diabetic medication, only 14,659(65%) were persistent with the medication (proportion days covered =0.8). A total of 6,689(23%) patients had disease burden, and 868(3%) had diabetes-related disease burden. When compared with patients who complied with ADA guidelines, noncompliers were more like to have disease burden (OR=1.5, 95% CI=1.4-1.6) or diabetes-related disease burden (OR=1.9, CI=1.6-2.3). Other factors significantly associated with diabetes-related disease burden included male gender (OR=1.2, CI=1.1-1.4), race other than White and Black (OR=1.3, CI=1.1-1.5), no Medicare eligibility (OR=2.1, CI=1.7-2.5), comorbidity (OR=1.6, CI=1.6-1.7), and nonpersistence with anti-diabetic medication (OR=1.4, CI=1.2-1.7). Conclusion: Appropriate diabetes care can prevent diabetes complications and avoid increased medical cost. These California Medicaid data suggest the need to develop and evaluate intervention programs targeted at T2DM patients who are at risk for noncompliance with diabetes care, especially those with comorbidities and/or those nonpersistent with anti-diabetic medication.