OBJECTIVES: To assess the association between insulin adherence and healthcare resource utilization and direct medical costs among Chinese insulin-naïve patients with type 2 diabetes (T2D). METHODS: Data were obtained from the Tianjin Urban Employee Basic Medical Insurance database (2008-2011). Adult patients with T2D who initiated insulin therapy from January 2009 through December 2010 and had continuous enrollment for 12 months pre- (baseline) and post-initiation (follow-up) were included. Adherence was measured using the medication possession ratio (MPR). Patients with a ≥80% MPR were adherent. All-cause healthcare resource utilization and direct medical cost during the follow-up period were assessed. Regression models were conducted to examine the association between insulin adherence, healthcare resource utilization, and direct medical cost. RESULTS: In total, 24,192 patients were included (mean age, 58.9 years; male, 50.5%; retired, 69.6%). Mean (SD) MPR during the follow-up period was 0.50 (0.36), with 30.9% of patients adherent. Compared with non-adherent patients, adherent patients were less likely to be hospitalized during the follow-up period (22.1% vs. 32.2%, adjusted odds ratio [95% confidence interval]: 0.89 [0.82-0.97]; P=0.005). Of those hospitalized, adherent patients had a shorter length of hospital stay (22.2 vs. 31.3 days, adjusted difference = -2.9 days; P=0.001). Adherent patients incurred significantly higher direct medical total costs ($4997 vs. $3088, adjusted difference = $2633), medication costs ($4302 vs. $2135, adjusted difference = $2421), and outpatient service costs ($346 vs. $207, adjusted difference = $145) (all P values <0.001). However, inpatient service costs were significantly lower for adherent patients ($350 vs. $747, adjusted difference = $101; P<0.001). CONCLUSIONS: Among Chinese patients with T2D who initiated insulin, better adherence to insulin was associated with a lower risk of hospitalization, shorter inpatient duration, and lower inpatient service costs. Better adherence was associated with a higher total cost, mainly driven by the higher outpatient medication costs.