Objective-To estimate the burden of illness from diabetes using a population health survey linked to a population-based diabetes registry. Research Design and Methods-Measures of health-related quality of life (HRQOL) from the 1996/97 Ontario Health Survey (n=35,517) were combined with diabetes prevalence and mortality data from the Ontario Diabetes Database (n=487,576) to estimate the impact of diabetes on life expectancy, health-adjusted life expectancy (HALE), and HRQOL. Results-Life expectancy of people with diabetes was 64.7 and 70.7 years for men and women, respectively-12.8 and 12.2 years less than that for men and women without diabetes. Diabetes had a large impact on instrumental and basic activities of daily living, more so than on functional health. HALE was 58.3 and 62.7 years, respectively, for men and women-11.9 and 10.7 years less than that of men and women without diabetes. Eliminating diabetes would increase Ontario life expectancy by 2.8 years for men and 2.6 years for women; HALE would increase by 2.7 and 3.2 years for men and women, respectively. Conclusions-The burden of illness from diabetes in Ontario is considerable. Efforts to reduce diabetes would likely result in a "compression of morbidity." An approach of estimating diabetes burden using linked data sources provides a robust approach for the surveillance of diabetes.