OBJECTIVES: To estimate medical expenditure for people with diabetes in Urban Employee Basic Medical Insurance (UEBMI) program in 2011 in Beijing, China. METHODS: Claims data from Beijing UEBMI database during 2010.10.01 to 2011.09.30 was extracted with the criterion of people diagnosed with “diabetes mellitus” during this period. The Sum_All Medical method was used for expenditure estimation. Information of physician visits, hospital admission rate, medical expenditure and its constitutions, length of stay were analyzed using STATA 11. RESULTS: A total of 612,227 insured urban employees were diabetes, accounting for 5.2% of population in the program of UEBMI in Beijing during 2010.10.01 to 2011.09.30. Annual outpatient visits were37.4 times/person and the cost was CNY (Chinese Yuan) 388.42/visit, resulting in CNY 14526.91 for annual outpatient expenditure. The annual hospital admission rate of the investigated people with diabetes was 7.08%. For those who had used inpatient services, annual hospital admissions were 1.78 times/person (length of stay was 16.35 days) and the cost was CNY 15070.99/admission, resulting in CNY 26826.37 for annual inpatient expenditure. The total of annual medical expenditure was CNY16426.21/person, of which, the cost of western drugs, Chinese traditional drugs, treatment, laboratory test, examination and others accounted for 48.46%, 30.76%, 9.08%, 5.17%, 4.65% and 1.88% respectively. The cost of insulin accounts for 2.80% of total medical expenditure. CONCLUSIONS: The proportion of people with diabetes in the UEBMI program in Beijing is consistent with the high diabetes prevalence reported from other epidemiological studies. Diabetes is becoming a chronic epidemic disease with major public concern. This study showed that in Beijing, significant amount of societal and medical resources were consumed by people with diabetes. Early glycemic control and appropriate drug utilization should be the key to reduce the burden of diabetes.