BACKGROUND: Diabetes mellitus is an important cause of mortality and morbidity in western nations with high costs for both patients and healthcare systems. MATERIAL AND METHODS: Based on the latest epidemiological studies and in combination with Spanish demographic data the direct healthcare costs of known diabetes mellitus were estimated for the following areas: hospitalisation directly due to the disease, hospitalisation due to certain chronic complications such as acute myocardial infarction, amputations and renal disease (dialysis and transplant), outpatient visits, consumption of anti-diabetic medication, self-control, analyses, additional explorations and camps for diabetic children. RESULTS: In 1994, the total direct costs of diabetes mellitus in Spain were estimated to be more than 90,000 milions pesetas in a population of more than 1,400,000 known diabetic persons. This implies an average annual costs of approximately 63,000 pesetas per patient. If this cost is divided into categories, hospitalisation represents approximately 58% of the global cost, outpatient visits 14%, antidiabetic drugs 13%, self-control 4.7%, analyses 10% and camps a mere 0.04%. CONCLUSIONS: The most important component of the costs of diabetes mellitus in Spain in 1994 was hospitalisation due to the disease itself and its chronic complications which would seem to logically imply that resources ought to be targeted at reducing or postponing the development of such complications.