To identify optimal cut-off points of fasting plasma glucose for two-step strategy in screening of undiagnosed diabetes in Chinese people, data were selected from two cross-sectional studies of Metabolic Syndrome in Zhejiang Province of China, Zhejiang Statistical Yearbook (2010), and published literatures. Two-step strategy was used among 17437 subjects sampled from population to screen undiagnosed diabetes. Effectiveness (proportion of cases identified), costs (including medical and non-medical costs), and efficiency (cost per case identified) of these different two-step screening strategies were evaluated. This study found the sensitivities of all the two-step screening strategies with further Oral Glucose Tolerance Test (OGTT) at different Fasting Plasma Glucose (FPG) cut-off points from 5.0 to 7.0 (mmol/L) ranged from 0.66 to 0.91. For the FPG point of 5.0 mmol/L, 91 percent of undiagnosed cases were identified. The total cost of detecting one undiagnosed diabetes case ranged from 547.1 to 1294.5 CNY/case, and the strategy with FPG at cut-off point of 6.1 (mmol/L) resulted in the least cost. Considering both sensitivity and cost of screening diabetes, FPG cut-off point at 5.4 mmol/L was optimized for the two-step strategy. In conclusion, different optimal cut-off points of FPG for two-step strategy in screening of undiagnosed diabetes should be used for different screening purposes.