Objective: We compared the cost-effectiveness of two inpatient diabetes care models: one offered by a specialized diabetes team (SDT) versus a primary service team (PST). Research design and methods: We retrospectively evaluated 756 hospital admissions of patients with diabetes to non-critical care units over 6 months. Out of 392 patients who met the eligibility criteria, 262 were matched 1:1 based on the mean of the initial four blood glucose (BG) values after admission. Primary outcomes were 30-day readmission rate and frequency, hospital length of stay (LOS) and estimated hospital cost. Secondary outcomes included glycemic control and BG variability. Results: Diabetes complexity and in-hospital complications were significantly higher among patients treated by SDT versus PST. Thirty-day readmission rate to medical services was lower by 30.5% in the SDT group versus the PST group (P<0.001), while 30-day readmission rate to surgical services was 5% higher in the SDT group versus the PST group (P<0.05), but frequency of 30-day readmissions was lower (1.1 vs 1.6 times, P<0.05). LOS in medical services was not different between the two groups, but it was significantly longer in surgical services in SDT (P<0.05). However, LOS was significantly lower in patients who were seen by SDT during the first 24 hours of admission compared with those who were seen after that (4.7 vs 6.1 days, P<0.001). Compliance to follow-up was higher in the SDT group. These changes were translated into considerable cost saving. Conclusions: Inpatient diabetes management by an SDT significantly reduces 30-day readmission rate to medical services, reduces inpatient diabetes cost, and improves transition of care and adherence to follow-up. SDT consultation during the first 24 hours of admission was associated with a significantly shorter hospital LOS.