OBJECTIVES: To estimate direct and indirect costs associated with type 2 diabetes (T2DM) in Tianjin, China.  METHODS: Data were obtained from a cross-sectional survey of patients with T2DM from October to December, 2011 in Tianjin, China. Patients were eligible for the survey if they were ≥18 years, had T2DM diagnosis for ≥1 year, and received antidiabetic treatment ≥1 year. T2DM-related outpatient utilization and costs and direct non-medical costs were reported for the past 2 weeks and were extrapolated to 1 year. Inpatient utilization and costs for T2DM were reported for the past year. Indirect costs resulting from DM-related productivity loss due to absenteeism were estimated among employed patients using the average daily wage of urban employees in Tianjin. All costs were reported in 2011 US dollar using the exchange rate of 6.47 Chinese Yuan to 1 USD.  RESULTS: A total of 279 patients (253 outpatients and 26 inpatients) were included with 50.9% female, mean age of 60.7 years and mean disease duration of 10.4 years. The mean annual direct medical costs were $4521: 76.3% were covered by payers and 23.7% by patients. Outpatient and inpatient costs were $2886 and $1411, accounting for 63.8% and 31.2% of direct medical costs, respectively. The rest were attributed to medications purchased from retail pharmacies and self-glucose monitoring costs. Mean annual direct non-medical costs were $209, including $146 nutrition costs, $63 transportation and accommodation costs. Mean annual costs associated with productivity loss were $723 among employed patients (n=48).  CONCLUSIONS: T2DM poses substantial economic burden to payers, patients and society. The majority of total costs are attributed to direct medical costs but indirect costs from productivity loss are substantial among employed patients.