OBJECTIVES:  To examine the association between body mass index (BMI [kg/m]) categories, prevalence of treated type 2 diabetes mellitus (T2DM), and total healthcare costs among patients who are overweight or obese. METHODS:  Retrospective, observational study using electronic medical records linked to administrative claims data for millions of individuals in the United States. Patients selected for study were aged 18-64 years, had a recorded BMI between 25.5-80 during 2014, and were continuously enrolled in health insurance for 6 months before and after the last BMI measurement (12-month evaluation period) in 2014. Patients were classified into BMI categories using the last recorded BMI in 2014: 25-29.9 (overweight); 30-34.9 (obese/class-I [OCI]); 35-39.9 (obese/class-II [OCII]); ≥40 (obese/class-III [OCIII]). Patients were classified as having treated T2DM if they had ≥1 pharmacy claim for T2DM medication during the evaluation period; the remaining patients were classified into a reference group comprising patients without T2DM and those with untreated T2DM. Multivariable generalized linear models, adjusting for age, sex, race/ethnicity, and geography, were used to generate adjusted estimates of treated T2DM prevalence by BMI category and evaluation period total healthcare costs by BMI category/treated T2DM through recycled prediction. RESULTS:  A total of 155,837 patients were included for study (mean age=47 years; 50% female): 71,793 (46.1%) overweight; 45,391 (29.1%) OCI; 21,787 (14.0%) OCII; 16,866 (10.8%) OCIII. The adjusted prevalence of treated T2DM and total healthcare costs increased significantly with each BMI category relative to the overweight category (all P<0.001): overweight, treated T2DM prevalence=5.5%, $16,108 for treated T2DM vs. $9,112 for the reference group; OCI, prevalence=10.1%, $17,241 treated T2DM vs. $9,752 reference; OCII, prevalence=16.4%, $18,412 treated T2DM vs. $10,415 reference; OCIII, prevalence=24.0%, $20,434 treated T2DM vs. $11,558 reference. CONCLUSIONS:  Among patients who were overweight or obese, the prevalence of treated T2DM and total healthcare costs increased substantially with increasing BMI.