OBJECTIVE: To evaluate whether nurse-directed diabetes care reduced preventable diabetes-related urgent care/emergency room visits and hospitalizations in a minority population. RESEARCH DESIGN AND METHODS: Diabetic patients who receive care in a county public health clinic were randomly selected for a Diabetes Managed Care Program (DMCP) in which a specially trained nurse followed detailed treatment algorithms to provide diabetes care for 1 year. Preventable diabetes-related urgent care/emergency room visits and hospitalizations for these patients incurred during the intervention year and the year before enrollment were compared. Preventable diabetes-related causes were defined as metabolic (diabetic ketoacidosis, hyperglycemia, or hypoglycemia) or infection (cellulitis, foot ulcer, osteomyelitis, fungal infection, or urinary tract infection). RESULTS: Use of the urgent care/emergency room and hospitalizations during the intervention year and the year prior were available for 331 patients who completed the DMCP intervention. There were 95 [corrected] total urgent care/emergency room visits and hospitalizations in the year before entering the DMCP and 52 [corrected] during the DMCP year, a 45[corrected]% reduction. Preventable diabetes-related episodes were far fewer. During the prior year, 14 patients made 15 urgent care/emergency room visits and 5 patients incurred 6 hospitalizations. During the DMCP year, four different patients made five emergency room/urgent care visits and one other patient was hospitalized. Preventable diabetes-related use was significantly (P < 0.001) lower during the intervention year compared with the prior year. Total charges for urgent care/emergency room visits and hospitalizations only (not other charges related to diabetes care) during the year before entering the DMCP were $129,176 compared with $24,630 during the DMCP year. CONCLUSIONS: When compared with usual care, nurse-directed diabetes care resulted in significantly fewer urgent care/emergency room visits and hospitalizations for preventable diabetes-related causes. Policy makers seeking to improve diabetes care and conserve resources should seriously consider adopting this approach.