OBJECTIVES: Although a number of studies have been conducted to estimate the economic implications of comorbid obesity in diabetic patients, mixed conclusions have been reached. This study sought to assess the relationship between Body Mass Index (BMI) and healthcare costs using 2006-2010 data from the Medical Expenditure Panel Survey (MEPS). METHODS: Eligible patients were ≥18 years, with a diabetes diagnosis (CCC-250) and on at least one oral antidiabetic medication. Primary outcomes were: 1) diabetes-related direct medical costs, 2) all-cause direct medical costs, and 3) indirect costs.  Costs were inflated to 2010 US dollars using the medical consumer price index.  The main independent variable was BMI, categorized as normal weight BMI: 18.0-24.9; overweight BMI: 25.0-29.9; obese BMI: 30.0-40.0^; and morbidly obese BMI: >40.0 kg/m RESULTS: A final unweighted sample size of 7,003 patients was obtained (14.6 million weighted), with a mean age (±SE) = 61.2 (±0.2) years, mean BMI (±SE) = 32.2 (±0.1), and 50.4% were males. After controlling for covariates, diabetes-related direct medical costs of normal-weight patients ($1,622) were lower than their overweight ($1,955; p=0.031), obese ($2,259; p=0.001) and morbidly obese ($2,636; p=0.003) peers. But direct all-cause medical costs of overweight patients were less ($9,715; p=0.021) compared to normal weight ($11,623) patients. All-cause direct costs for obese ($11,419) and morbidly obese ($13,043) patients were not statistically different than costs for normal weight peers. Indirect costs (estimated as lost productivity) were similar between all 4 cohorts ($532-$535). CONCLUSIONS: Being overweight (BMI = 25.0 to 29.9 kg/m) was associated with higher diabetes-related direct medical costs, but  lower all-cause direct medical costs compared to their normal weight peers.