OBJECTIVES: Type 2 diabetes mellitus affects 358,267 individuals in Austria and exerts a substantial economic burden on patients, healthcare systems and society. The main objective of this study is to analyse the burden of disease as well as the direct and indirect healthcare costs of type 2 diabetes in Austria.  METHODS: A burden of disease study, which evaluates all kinds of disease burden, like costs, quality adjusted life years (QALYs) and disability adjusted life years (DALYs) lost, was conducted. This study uses a prevalence-based bottom-up approach and projects costs over the time horizon of one year. Data were collected via literature review, published list prices and hospital records. Costs from published sources were used from the societal perspective. The direct costs include hospital, treatment and physician consultation costs. Indirect costs cover patient care giver costs as well as work absenteeism.  RESULTS: The average costs per year of a Diabetes Type 2 are 3,242.91 EUR. Inpatient care is a major contributor to costs, accounting for 81% of total costs while drug costs account for an average of 14%. The estimated total direct annual cost for all patients diagnosed with type 2 diabetes is 1.2 billion EUR. This represents a share of 3.3% of the country´s total healthcare expenditures. The average annual indirect costs for patients with diabetes mellitus type 2 amounts to 781 million EUR. Compared to the healthy population, the diabetes mellitus type 2 population have utility decrements of 251,974 QALYs. Moreover type 2 diabetes patients will lose 19,853 DALYs within one year.  CONCLUSIONS: Type 2 diabetes mellitus is a common disease and the prevalence is expected to increase considerably in the future. The findings of this study demonstrate the high economic import of the disease.