The aim of this study was to gain a preliminary indication of the long-term clinical and economic implications of converting treatment for patients with type 2 diabetes to insulin detemir±oral hypoglycemic agents (OHAs) in a routine clinical practice setting in the United States. With the use of outcome data and patient characteristics reported from an ongoing prospective observational trial, a validated computer simulation model of diabetes was used to project the clinical and cost outcomes associated with therapy conversion to insulin detemir over a 35-y period from (1) OHA only, (2) neutral protamine Hagedorn insulin (NPH)±OHA, and (3) insulin glargine±OHA. Cost-effectiveness was assessed from a third-party healthcare payer perspective for the year 2005. Costs and clinical outcomes were discounted at a rate of 3%. Treatment with insulin detemir±OHA was associated with increases in quality-adjusted life expectancy of 0.309, 0.350, and 0.333 quality-adjusted life-years (QALYs) versus treatment with OHA alone, NPH±OHA, and insulin glargine±OHA, respectively. Increases in pharmacy costs were partially offset by reduced complications, particularly renal complications and neuropathy. Projected incremental cost-effectiveness ratios were well within the range considered to represent good value in the United States, at $7412, $6269, and $3951 per QALY gained for treatment with Idet+-OHA versus OHA alone, NPH±OHA, and Iglarg±OHA, respectively. On the basis of preliminary evidence of short-term improvements in glycemic control and reduced hypoglycemia, therapy conversion to insulin detemir±OHA from OHA alone, NPH±OHA, or insulin glargine±OHA was projected to increase quality-adjusted life expectancy and to represent a cost-effective treatment option in the United States.