The objective of our study was to determine the hospital care resource utilization and direct medical costs incurred for in-patients with diabetes compared with non-diabetic in-patients. The data were obtained from the records division of the Puerta del Mar University Hospital, an 800-bed tertiary care hospital in Cádiz in the south of Spain. We assessed the rate of hospital admissions, length of stay, readmissions, mortality and costs for both diabetic and non-diabetic people. People with diabetes accounted for 10.9% of total hospital discharges (2453 discharges), 15.3% of total stays (30,771 days) and 16.1% of total cost (Euro 7,417,688). We estimated a hospitalization rate of 135 per 1000 persons with diabetes (compared with 95 per 1000 non-diabetic persons). Diabetic patients were hospitalized, on average, for 4 days longer than non-diabetic patients (12.5 +/- 14.5 (+/-SD) vs 8.5 +/- 10.6 days; P < 0.001) and had higher risks of readmission (RR: 2.29 (95% CI: 1.91-2.74)) and of mortality during the in-patient period (2.29 (1.91-2.74)) than non-diabetic patients. The overall hospitalization cost was significantly higher in diabetic (Euro 3023 +/- 3463) than in non-diabetic patients (Euro 1949 +/- 2528), 55% higher than the average general cost. We conclude that the hospital care resource utilization and economic burden due to diabetes mellitus in our hospital is substantial and disproportionate to the number of affected people.