Background Even though previous research has demonstrated improved outcomes of integrated care initiatives, it is not clear why and when integrated care works. This study aims to contribute to filling this knowledge gap by examining the implementation of integrated care for type 2 diabetes by two Dutch care groups. Methods An embedded single case study was conducted including 26 interviews with management staff, care purchasers and health professionals. The Context + Mechanism = Outcome Model was used to study the relationship between context factors, mechanisms and outcomes. Dutch integrated care involves care groups, bundled payments, patient involvement, health professional cooperation and task substitution, evidence-based care protocols and a shared clinical information system. Community involvement is not (yet) part of Dutch integrated care. Results Barriers to the implementation of integrated care included insufficient integration between the patient databases, decreased earnings for some health professionals, patients’ insufficient medical and policy-making expertise, resistance by general practitioner assistants due to perceived competition, too much care provided by practice nurses instead of general practitioners and the funding system incentivising the provision of care exactly as described in the care protocols. Facilitators included performance monitoring via the care chain information system, increased earnings for some health professionals, increased focus on self-management, innovators in primary and secondary care, diabetes nurses acting as integrators and financial incentives for guideline adherence. Economic and political context and health IT-related barriers were discussed as the most problematic areas of integrated care implementation. The implementation of integrated care led to improved communication and cooperation but also to insufficient and unnecessary care provision and deteriorated preconditions for person-centred care. Conclusions Dutch integrated diabetes care is still a work in ...