OBJECTIVES: To determine cost and outcomes of a diabetes clinic in a community hospital of Mae Hong Son Province in 1999. METHODS: A retrospective study, from the provider viewpoint, was performed by collecting three groups of annual operating cost; labour cost (LC), drug and medical supplies cost (MC), and diagnostic cost (DC). The clinic contained of behavioral group counseling about diet, drug, exercise and foot-care by nurses, pharmacist and self-help group. At the end of the study, outcomes were evaluated by the number of patient who achieved in the fasting blood sugar (FBS) of 126 mg/dL without any severe complications and/or the number of patient with adherence for follow up visits. RESULTS: Results showed that total operating cost of diabetes clinic was 193,244.64 Baht with a proportion of LC: MC: DC of 2.36: 5.55: 1. Drug and medical supplies accounted for more than 60% of total operating cost. The unit cost of diabetes clinic was 1,932.45 Baht per patient. In total, 62 patients with FBS control and 71 patients with adherence for follow-up were found from all of 100 diabetic patients in the clinic. A total of 33 successful patients with both FBS control without severe complications and having adherence were found. Uncontrol FBS and loss from follow up were the failures that affected to the cost through drug and medical supplies overuse and the number of unwanted admissions. CONCLUSIONS: Drug and medical supplies accounted for the highest cost of the clinic. To reduce cost of drug and medical supplies overuse and increase the outcomes of the clinic, drug and self-care personal counseling by pharmacist could be a good procedure for solving the problem. To evaluate the efficiency of the clinic, cost and outcomes were the needed indicators.