Background and aims In the present population-based study, we aimed to describe the per patient annual healthcare cost of people with diabetes in 2007–2012, to assess the relative burden of diabetes complications and other potential determinants on healthcare costs in the 2012 cohort, and to describe and analyse the determinants of the cost of incident cases diagnosed in 2012. Methods and results We analysed data from a retrospective cohort of residents in four Italian areas that were served by Local Health Units participating in the ARNO Observatory. Per patient annual healthcare costs (Euros) were estimated as the sum of all the resources supplied during that year (drugs, outpatient care, and hospitalisations). The mean per patient annual healthcare cost increased from €2752 in 2007 to €3191 in 2010, before decreasing to €2791 in 2012. The largest component of these costs was represented by hospitalisations (around €1550, on average; 51.7% of total cost), followed by outpatient care (€422; 14.6%) and drugs (€973; 33.7%). In 2012, the most relevant cost determinants were chronic diabetes complications, with an additional cost due to nephropathy/end stage renal disease (€4683), amputations (€5042), lower extremity revascularization (€4808), and cerebrovascular diseases (€3861). Costs associated with incidence cases were higher than those associated with prevalent. Conclusion The present study provides evidence on the excess of healthcare costs due to diabetes complications in both prevalent and incident cases.