OBJECTIVES: The Diabetes Utility Index (DUI) is a brief, self-administered diabetes-specific PBMH. We describe the development of the valuation function for the DUI and report its validity. METHODS: MAUT identified 20 of 768 DUI health states (anchor states, single-attribute level states, and marker states) for which preferences were then elicited via Visual Analog Scale and Standard Gamble (SG) tasks during personal interviews of individuals with diabetes recruited from primary care and community settings around Morgantown, WV. A valuation function calculating utilities for all DUI health states and attribute-level utilities was developed. A DUI validation survey was mailed in collaboration with the West Virginia University Diabetes Institute. Clinical data (ICD-9 codes and A1C values) and other self-reported data were merged with function-derived DUI utilities. RESULTS: Employing MAUT, a DUI valuation function between 1.00=Perfect Health and 0.00=the all worse “Pits” state (adjusted to yield utilities between 1.00=Perfect Health and 0.00=Dead) was developed from data on 100 interviewees. A total of 396 persons with diabetes completed the validation survey (33% response). The DUI valuation function-derived utilities compared favorably to cardinal SG utilities obtained directly on three DUI health states, but slightly underestimated SG utilities for mild and moderate health states (mean absolute difference = 0.05). There was a small correlation between DUI utilities and average A1C values (r = -0.30, p<0.001). Respondents with two or more complications had lower DUI utilities than those with none (p<0.001) or one complication (p=0.015). Insulin users had lower DUI utilities compared to non-users (p<0.001), and those with A1C under 7 had higher DUI utilities than those with A1C of 7 or greater (p<0.001). CONCLUSIONS: These results provide initial evidence of the DUIs feasibility and validity. Further research will demonstrate the generalizability of these findings, show the responsiveness of the DUI, and report the clinical meaningfulness of DUI change scores.