To estimate the costs of diagnosis and treatment of diabetes in Tanzania. Costs estimated from the reported and recorded experience of patients with newly presenting diabetes in 1989-90 and of diabetic patients first seen in 1981-2. Muhimbili Medical Centre, Dar es Salaam. 464 patients (315 men and 149 women). 262 patients diagnosed during 1 September 1989-31 August 1990 (group 1) and 202 during 1 June 1981-31 August 1982 (group 2). The average annual direct cost of diabetes care in 1989-90 was $287 for a patient requiring insulin and $103 for a patient not requiring insulin. Purchase of insulin accounted for 68.2% ($156) of the average annual outpatient costs for patients requiring insulin. For patients not requiring insulin the cost of oral hypoglycaemic drugs and treatment of chronic complications and infections accounted for 42.5% ($29.3) and 48.8% ($33.7) of costs respectively. Cost of outpatient care of diabetic patients for the whole of Tanzania was estimated at $2.7m, *75,128 (32.2%) of which was for insulin. Doctors' and nurses' costs accounted for 0.2% of total costs of outpatient care. The annual direct inpatient care costs were estimated at $1.25m. Around 0.2% of the Tanzanian population aged 15 years and over used the equivalent of 8% of the total government health expenditure, which was $47,4088,382. Diabetes places a severe strain on the limited resources of developing countries. If African patients with diabetes have to pay for their treatment most will be unable to do so and will die.