Objective: We previously developed an incidence-based Markov model to estimate the lifetime cost of type 2 diabetes (T2DM) in Colombia. Here, we adapted it to seven other countries, representing almost 77.9% of Latin America. To estimate the total direct and indirect lifetime costs of T2DM in Latin America. Methods: The model was adapted to each country using country-specific epidemiologic rates and cost inputs. Due to the lack of centralized databases in this region, purchase power parity conversion factor was used. Costs in 2007 USD (adjusted using the Consumer Price Index) and outcomes were modeled over a 32-year time horizon using a 5% discount rate for both. We calculated the direct, indirect, and total cost/patient/year, then used epidemiological data to extrapolate to all persons with T2DM in each country. Costs were summed for the eight countries, then projected to Latin America, weighing by population estimates. Results: Total direct costs for Latin America were $22.8 billion, indirect costs were $46.9 billion, for a total of $69.7 billion for 2007. Colombia had the lowest total cost/patient/year $847, although Venezuela had lowest direct costs ($254 versus $288) and Peru had lowest indirect costs ($547 versus $559); Mexico was highest ($1340/patient/year); Brazil and Mexico were responsible for 63% of direct and 62% of indirect costs in Latin America. These costs differ from those estimated using a prevalence based model (direct=$10.7, indirect=$54.5, total=$65.2 billion). Conclusion: This study presents new tools to estimate the cost of illness for type 2 diabetes in Latin America. However, results must be considered as rough estimates and validations are required to verify them.