Diabetes Mellitus (DM); a rising epidemic, the price of managing which is increasing by and large. The intent of this research was to evaluate the cost of illness of Diabetes amongst those attending the outpatient departments of three tertiary care hospitals in Peshawar Pakistan. This is a first study piloted from a communal outlook to evaluate the cost of treating and managing diabetes in Pakistan and also including the effect on quality of life of a person suffering from diabetes. This was a prevalence based ‘Cost of Illness’ research for diabetes management, carried out in outpatient clinics of three tertiary care hospitals of Peshawar, Pakistan. A structured questionnaire was used to gather data from 400 persons, selected at random, with diabetes. The monthly average direct cost for each diabetic was projected to be Pakistani Rupees 6,918.3. Medications accounted for major portion of direct cost, followed by laboratory examinations. It was found that increasing age, amount of complications and extended period of the ailment considerably escalates the encumbrance of cost on the society results were all highly significant (p < 0.001). Associating cost with household revenue, it was found that the underprivileged part of society is spending substantial of over-all domestic income on diabetes management. This research paper established that considerable expenditure is experienced by individuals with diabetes; with the suggestion that resources may possibly be conserved by prevention, prompt diagnosis and a decline in complications and co-morbidities by way of enhanced diabetes management. Significant and worthwhile prevention plans are needed to be started to make best use of health improvements and to converse the progress of this epidemic. Supervisor:- Dr. Mahmood Khalid