The aim of this study was to gain a preliminary indication of the long-term clinical and economic implications of converting treatment for patients with type 2 diabetes to insulin detemir +/- oral hypoglycennic agents (OHAs) in a routine clinical practice setting in the United States. With the use of outcome data and patient characteristics reported from an ongoing prospective observational trial, a validated computer simulation model of diabetes was used to project the clinical and cost outcomes associated with therapy conversion to insulin detemir over a 35-y period from (1) OHA only, (2) neutral protamine Hagedorn insulin (NPH) OHA, and (3) insulin glargine OHA. Cost-effectiveness was assessed from a third-party healthcare payer perspective for the year 2005. Costs and clinical outcomes were discounted at a rate of 3%. Treatment with insulin detemir OHA was associated with increases in quality-adjusted life expectancy of 0.309, 0.350, and 0.333 quality-adjusted life-years (QALYs) versus treatment with OHA alone, NPH OHA, and insulin glargine OHA, respectively. Increases in pharmacy costs were partially offset by reduced complications, particularly renal complications and neuropathy. Projected incremental cost-effectiveness ratios were well within the range considered to represent good value in the United States, at $7412, $6269, and $3951 per QALY gained for treatment with ldet +/- OHA versus OHA alone, NPH +/- OHA, and Iglarg +/- OHA, respectively. On the basis of preliminary evidence of short-term improvements in glycemic control and reduced hypoglycemia, therapy conversion to insulin detemir +/- OHA from OHA alone, NPH +/- OHA, or insulin glargine +/- OHA was projected to increase quality-adjusted life expectancy and to represent a cost-effective treatment option in the United States.