OBJECTIVES: To examine the economic outcomes associated with dual-goal achievement of reaching glycated hemoglobin (HbA1c <7%) and low-density lipoprotein cholesterol (LDL-C <100mg/dL) targets in patients with type 2 diabetes mellitus (T2DM).  METHODS: Adult T2DM patients (ICD-9 codes: 250.x0, 250.x2) were identified from the South Central Veterans Affairs Health Care Network (01/2004-06/2010) and followed until the end of data or death. A longitudinal design was adopted with patient information recorded in six-month cycles. Goal achievement status in each cycle was determined based on the average HbA1c and LDL-C levels using the area under the curve method. Economic outcomes included diabetes-related utilization events (inpatient (IP) days, number of outpatient (OP) visits) and diabetes-related medical service costs. The association between goal achievement status in a given study cycle and economic outcomes in the following cycle were assessed using multivariate generalized linear models, controlling for within-patient correlation. RESULTS: A majority of the 75,646 patients selected for the study were male (97.4%); average age was 64.7 years, mean BMI was 31.6 kg/m2, and median follow-up time was 4.5 years. Compared with achievement of only the LDL-C goal, dual-goal achievement was associated with significantly fewer diabetes-related IP days (Incidence Rate Ratio (IRR): 0.93; 95% Confidence Interval (CI): 0.87-1.00), and OP visits (IRR: 0.88; CI: 0.87-0.89), and incurred significantly lower diabetes-related medical service costs (difference: -$130.89, p=0.02). Compared with achievement of only the HbA1c goal, dual-goal achievement was associated with significantly fewer OP visits (IRR: 0.98; CI: 0.97-1.00) but no statistical difference in the number of hospitalization days (IRR: 0.98, CI: 0.89-1.07) or diabetes-related medical service costs (difference:-$56.17, p=0.40). CONCLUSIONS: In this study of US Veterans with T2DM, dual-goal achievement was associated with fewer utilization events and lower costs when compared with only LDL-C goal achievement.