OBJECTIVES: To assess the clinical characteristics and economic burden of type-2 diabetes patients in the U.S. veteran population METHODS: A retrospective database analysis was performed using the Veterans Health Administration (VHA) Medical SAS Datasets from October 1, 2005 to May 31, 2012. All U.S. veteran beneficiaries diagnosed with type-2 diabetes were identified using International Classification of Disease 9th Revision Clinical Modification (ICD-9-CM) diagnosis code 250.x0 or 250.x2. Comorbidities and other clinical conditions were examined for the 12-month baseline period. Health care resource utilization and costs were assessed for the 12-month follow-up period. Descriptive statistics were calculated as means ± standard deviation and percentages to measure comorbidities, laboratory results, costs, and utilization distribution within the sample.  RESULTS: A total of 741,406 veterans were identified as diagnosed with Type 2 diabetes. Of these patients, 18.77% had glycated hemoglobin (HbA1c) test results ≥7% and 27.21% had abnormal serum creatinine results. 62.71% of patients were obese with a body mass index (BMI) of ≥30. The most common comorbidities were unspecified essential hypertension (21.62%), other and unspecified hyperlipidemia (6.75%) and post-traumatic stress disorder (5.15%). After examining treatment within 60 days of disease identification, simvastatin was the most commonly prescribed medication (21.62%), followed by metformin hydrochloride (27.43%). Insulin was also among the top 10 treatments with 10.67% of patients prescribed this medication. The percentage of patients with follow-up outpatient visits was 99.80%, which translated into $6,531 average outpatient costs. The percentages of inpatient (13.21%), emergency room (16.94%), physician office (99.76%) and pharmacy visits (90.33%) were also calculated for diabetes patients. CONCLUSIONS: Obesity may play an important role in patients' development of diabetes since two-thirds of studied patients were obese prior to disease identification.  Hypertension may also be an associated risk factor that should be further evaluated.