Background: Diabetes (DM) is associated with an accelerated aging that promotes frailty, a state of vulnerability to stressors, characterized by multisystem decline that results in diminished intrinsic reserve and is associated with morbidity, mortality and utilization. Research suggests a bidirectional relationship between frailty and diabetes. Frailty is associated with mortality in patients with diabetes, but its prevalence and impact on hospitalizations are not well known. Objectives: Determine the association of frailty with all-cause hospitalizations and mortality in older Veterans with diabetes. Design: Retrospective cohort. Setting: Outpatient. Participants: Veterans 65 years and older with diabetes who were identified as frail through calculation of a 44-item frailty index. Measurements: The FI was constructed as a proportion of healthcare variables (demographics, comorbidities, medications, laboratory tests, and ADLs) at the time of the screening. At the end of follow up, data was aggregated on all-cause hospitalizations and mortality and compared non-frail (robust, FI≤ .10 and prefrail FI=>.10, <.21) and frail (FI≥.21) patients. After adjusting for age, race, ethnicity, median income, history of hospitalizations, comorbidities, duration of DM and glycemic control, the association of frailty with all-cause hospitalizations was carried out according to the Andersen-Gill model, accounting for repeated hospitalizations and the association with all-cause mortality using a multivariate Cox proportional hazards regression model. Results: We identified 763 patients with diabetes, mean age 72.9 (SD=6.8) years, 50.5% were frail. After a median follow-up of 561 days (IQR=172), 37.0% they had 673 hospitalizations. After adjustment for covariates, frailty was associated with higher all-cause hospitalizations, hazard ratio (HR)=1.71 (95%CI:1.31-2.24), p<.0001, and greater mortality, HR=2.05 (95%CI:1.16-3.64), p=.014. Conclusions: Frailty was independently associated with all-cause hospitalizations and mortality in older Veterans with diabetes. Interventions to reduce the burden of frailty may be helpful to improve outcomes in older patients with diabetes.