Abstract Background To assess differences in outpatient costs among pharmaceutically treated diabetes patients with and without a diagnosis of depression in a Dutch primary care setting. Methods A retrospective case control study over 3 years (2002-2004). Data on 7128 depressed patients and 23772 non-depressed matched controls were available from the electronic medical record system of 20 general practices organized in one large primary care organization in the Netherlands. A total of 393 depressed patients with diabetes and 494 non-depressed patients with diabetes were identified in these records. The data that were extracted from the medical record system concerned only outpatient costs, which included GP care, referrals, and medication. Results Mean total outpatient costs per year in depressed diabetes patients were €1039 (SD 743) in the period 2002-2004, which was more than two times as high as in non-depressed diabetes patients (€492, SD 434). After correction for age, sex, type of insurance, diabetes treatment, and comorbidity, the difference in total annual costs between depressed and non-depressed diabetes patients changed from €408 (uncorrected) to €463 (corrected) in multilevel analyses. Correction for comorbidity had the largest impact on the difference in costs between both groups. Conclusions Outpatient costs in depressed patients with diabetes are substantially higher than in non-depressed patients with diabetes even after adjusting for confounders. Future research should investigate whether effective treatment of depression among diabetes patients can reduce health care costs in the long term.