OBJECTIVES: The DCCT and UKPDS studies provided convincing evidence that tight glycemic control reduces micro- and macrovascular complications. The large, German ROSSO study (Martin et al. Diabetologia. 2006 Feb; 49(2):271-278) showed that self-measurement of blood glucose (SMBG) is associated with reduced risk for health complications in newly diagnosed type 2 diabetes patients. The aim of this economic analysis was to assess possible cost savings in a Taiwanese population of newly diagnosed type 2 diabetes patients. METHODS: The original study groups (patients with and without SMBG) were matched based on age, gender, smoking status and blood glucose at diagnosis. 813 matched pairs (1626 patients) have been eligible for this economic analysis. A further segmentation based on the antidiabetic medication revealed 971 patients with oral antidiabetic drugs only (“OAD only”) and 372 patients with oral antidiabetic drugs plus insulin (“OAD plus insulin”). Our assessment is based on costs for seven diabetes related complications, follow-up costs for these complications, costs for outpatient physician services, cost of antidiabetic treatment and costs for meters and strips for patients performing SMBG. We used a cost parameter set reflecting the situation in Taiwan in 2007. RESULTS: Applying SMBG in patients treated with “OAD only” revealed an average cost saving of US$65 per patient-year (py) due to reduced complications when compared to patients not using SMBG. The additional annual cost for SMBG summed up to US$25 per py. In patients treated with “OAD plus insulin” the average cost saving amounted to US$ 373 per py with annual SMBG related costs of US$36. CONCLUSIONS: Use of SMBG in type 2 diabetes patients may reduce complication related costs. The additional costs for SMBG (meters, strips) are compensated by far. The acceptance of SMBG for a wider section of the diabetic population could disburden the Taiwanese health budget.