OBJECTIVES:  To examine the impact of antidiabetic-induced hypoglycemia on clinical outcomes and resource utilization among T2DM patients  in the Veterans Affairs.  METHODS:  This retrospective cohort study used electronic medical records between 01/01/2004 and 09/01/2010 from the Veterans Integrated Service Network (VISN) 16 data warehouse.   Patients were required to have at least 2 records of T2DM ICD-9-CM diagnosis (250.xx except for 250.x1 and 250.x3). The first dispense date of a new antidibetic agent (index drug) were defined as the index date.  No hypoglycemia diagnosis was allowed during the one-year pre-index period.  The hypoglycemia cohort and control cohort were defined by ICD-9-CM diagnosis of hypoglycemia (250.8, 251.0, 251.1 and 251.2) within the index-treatment period and no hypoglycemia during the one-year post-index period, respectively.  Clinical outcomes included hemoglobin A1c, cardiovascular diseases (CVD) and micro-vascular complications.  Resource utilization included hospitalizations and emergency room (ER) visits.  Clinical outcomes were compared by Cox regression models, controlling for age, race, index drug, renal functions, and baseline variables: A1c, Charlson comorbidity index (CCI), and resource utilization. RESULTS:  Among 42,437 T2DM patients, 369 patients of the hypoglycemia cohort and 42,068 patients of the control cohort differed in racial and marital status, baseline CCI and resource utilization. The hypoglycemia cohort was more likely to receive insulin/sulfonylurea as index drug.  The post-index A1c was numerically higher in the hypoglycemia cohort than control cohort (10.12 vs 9.87, p = 0.0602). The hypoglycemia cohort was more likely to develop CVD (HR=1.32, 95%CI: 1.13-1.54) and 40% more likely to develop micro-vascular complications, compared with the control cohort.  Risks of hospitalization and ER visit were higher for the hypoglycemia cohort than control cohort (18.2% vs. 9.2%, 32.3% vs. 20.7%, both p-values < .0001, respectively). CONCLUSIONS:  Patients with hypoglycemia may lead to worse clinical outcomes and higher risks of hospitalization and ER visit than those without.