Aim: To compare healthcare resource utilization and costs according to smoking status in patients with type 2 diabetes in clinical practice. Methods: A retrospective cohort nested case-control study was designed. Cases were current smokers, while 2 types of controls (former smokers and never smokers) were matched (2 controls per case) for age, sex, duration of diabetes and burden of comorbidity using data from medical records. Noninstitutionalized diabetics of both genders, aged >18 years and seen consecutively over a 5-year period before the index date, were enrolled. Analysis compared healthcare resource utilization, loss of productivity due to sick leave and corresponding costs. Results: In total, 2,490 medical records were analyzed, i.e. 498 cases, 996 former smokers and 996 never smokers. Mean age was 63.4 years (64.9% male). Smokers had higher glycosylated hemoglobin levels (7.4 vs. 7.2 and 7.2%, respectively; p = 0.013) and a lower degree of metabolic control (49.2 vs. 54.7 and 55.8%; p = 0.036). Smokers had higher average annual costs (EUR 3,583) than former smokers (EUR 2,885; p < 0.001) and never smokers (EUR 2,183; p < 0.001). Conclusions: Diabetic smoker patients had lower metabolic control, higher health resource utilization and more sick leave, resulting in higher healthcare costs and lost productivity compared with both former and never smoker diabetics.