Diabetes mellitus is one of the most common metabolic diseases in many countries of the world. Its prevalence in Germany has increased 7- to 8-fold over the past 30 years. The clinical and economical importance of diabetes is determined by the frequent occurrences of such serious complications as neuropathy, retinopathy and nephropathy. Intensive insulin therapy with regular monitoring of blood glucose (up to 4 measurements daily) and adjustment of the insulin dose accordingly may achieve virtually normal levels of blood glucose and thus decrease the risk of these complications. The present cost-effectiveness-study shows that the higher costs of invasive insulin therapy are offset by savings of 8.114 German marks per patient resulting from the reduction in morbidity and mortality. On the basis of an estimated 5% to 10% type 1 diabetes among the total diabetic population (prevalence 4.9%), potential saving of 1.62 to 3.24 billion marks are calculated for Germany.