Korean Disease Control and Prevention Agency launched Control and Prevention Community-based Registration and Management for Hypertension and Diabetes mellitus Project (CRMHDP) in Gwangmyeong city, 2009. This project has provided incentives on both patient and physician and has made private clinics and Public Health Center (PHC) in a community collaborate for effective chronic disease management among elderly people. This study aimed to evaluate the effects of CRMHDP on medication compliance and hospitalization due to diabetes-specific complications. The retrospective cohort study design was based on data of Korean National Health Insurance (KNHI) with 2 control areas (A & B) with usual primary care service similar to Gwangmyeong city regarding community health resources. The data on the study subjects were examined for the following 5 years since the baseline point. Medication adherence rates of CRMHDP-enrollees after the project was significantly higher than two control groups. For the hospitalization due to any complications, adjusted hazard ratio in the intervention group, compared to the control group A and B, were 0.76 (95% Confidence Interval: 0.65–0.78) and 0.52 (95% Confidence Interval 0.41–0.78), respectively. CRMHDP could successful in improving the management of type 2 diabetes mellitus among elderly people in South Korean primary care settings.