PURPOSE This study evaluated the cost-effectiveness of an automated telephone self-management support with nurse care management (ATSM) intervention for patients with type 2 diabetes, which was tested among patients receiving primary care in publicly funded (safety net) clinics, focusing on non-English speakers. METHODS We performed cost analyses in the context of a randomized trial among primary care patients comparing the effects of ATSM (n = 112) and usual care (n = 114) on diabetes-related outcomes in 4 San Francisco safety net clinics. ATSM uses interactive phone technology to provide surveillance, patient education, and one-on-one counseling, and was implemented in 3 languages for a 9- month period. Cost utility was examined using quality-adjusted life-years (QALYs) derived from changes in scores on the 12-Item Short Form Health Survey. We also examined cost-effectiveness for costs associated with a 10% increase in the proportion of patients meeting diabetes-specifi c public health goals for increasing exercise, as recommended by Healthy People 2010 and the American Diabetes Association. RESULTS The annual cost of the ATSM intervention per QALY gained, relative to usual care, was $65,167 for start-up and ongoing implementation costs combined, and $32,333 for ongoing implementation costs alone. In sensitivity analyses, costs per QALY ranged from $29,402 to $72,407. The per-patient cost to achieve a 10% increase in the proportion of intervention patients meeting American Diabetes Association exercise guidelines was estimated to be $558 when all costs were considered and $277 when only ongoing costs were considered. CONCLUSIONS The ATSM intervention for diverse patients with diabetes had a cost utility for functional outcomes similar to that of many other accepted interventions targeted at diabetes prevention and treatment, and achieved public health physical activity objectives at modest costs. Because a considerable proportion of costs were fi xed, cost utility and cost-effectiveness estimates would likely be substantially improved in a scaled-up ATSM program.