Aim. To evaluate direct hospitalization costs attributable to diabetes and their determinants in a tertiary care hospital in mainland China between 2007 and 2008. Methods. A retrospective study of the hospitalization expenses for 489 inpatients with diabetes from June 2007 to July 2008 was conducted. All related cost components were defined and valued at the most detailed levels. Results. Median cost was 5307.8 RMB (range 3672.8-8193.2 RMB). The costs for biochemical tests (28%), pharmacy (26%), and therapies and supplies (21%) were the top 3, about 75% in total expenses. The expenses for the antihyperglycemic treatment alone accounted for 27.6% of total hospitalization expenses. Insulin treatment (P < .001), complication number (P < .001), length of hospitalization (P < .001), diabetes duration (P = .023), and hemoglobin A(1C) (P = .040) were the main factors affecting costs. Conclusions. Antihyperglycemic treatment expenses represent a minority of total costs; major costs are due to treatment of complications.