OBJECTIVES: The current study examined the trends in the incidence and prevalence of type 2 diabetes mellitus (T2DM) in the Medicare population. METHODS: A prospective population-based study was performed from January 1, 2008 through December 31, 2013, to determine the prevalence and incidence of patients diagnosed with T2DM (International Classification of Disease, 9^thRevision, Clinical Modification diagnosis codes 250.x0 and 250.x2) from the Medicare population. Patients with continuous enrollment in fee-for-service Medicare throughout the calendar year and at least 2 years prior, were included for study. The age- and gender-adjusted prevalence and incidence (overall and specified by age group and gender) of T2DM were calculated using direct standardization to the U.S. population aged 65 years or older in 2010, using gender-specific age groups. RESULTS: The annual adjusted overall prevalence of T2DM increased from 27.92% in 2008 to 32.00% in 2013, whereas the annual overall incidence rate decreased from 4.60% in 2008, to 2.79% in 2013. T2DM prevalence and incidence rates were higher among men compared to women, every year. Patients aged 80-84 had the highest prevalence rate in 2008 (30.40%) and 2011 (36.16%), whereas in 2012 (37.46%) and 2013 (38.57%), patients aged 85-89 had the highest prevalence rates. From 2008 to 2013, there was a steady growth in the prevalence rates among patients older than 75. In 2008, the highest T2DM incidence was observed in the Virgin Islands (9,885 per 100,000 person-years). In 2013, the highest incidence of T2DM was in New Jersey (6,143 per 100,000 person-years).  CONCLUSIONS: From 2008 to 2013, T2DM prevalence increased and incidence decreased. Men were more likely to be diagnosed with T2DM compared to women.