Abstract Aim To provide insight into healthcare resource utilization and hospital expenditure of patients treated for diabetes in Dutch hospitals. Materials and methods We conducted an observational cohort study of 193 840 patients aged ≥18 years and treated for diabetes mellitus in 65 Dutch hospitals in 2019 to 2020, using real‐world reimbursement data. Consultations, hospitalizations, technology use, total hospital and diabetes care costs (encompassing all care for diabetes itself) were assessed during 1‐year follow‐up. In addition, expenditure was compared with that in the general Dutch population. Results Total hospital costs for all patients with diabetes were €1 352 690 257 (1.35 billion) per year, and 15.9% (€214 963 703) was associated with treatment of diabetes. Mean yearly costs per patient were €6978, with diabetes care costs of €1109. Mean hospital costs of patients exceeded that of the Dutch population three‐ to sixfold. Total hospital costs increased with age, whereas diabetes expenditure decreased with age (18‐40 years, €1575; >70 years, €932). Of all patients with diabetes, 51.3% (n = 99 457) received care related to cardiovascular complications. Micro‐ and macrovascular complications, or a combination, increased hospital costs (1.4‐5.3 times higher). Conclusions The hospital resource use of Dutch diabetes patients is high, with a large burden of cardiovascular complications. Resource use is rooted mainly in hospital care of diabetes‐related complications, not in the treatment of diabetes. Early treatment and prevention of complications remain imperative to taper future healthcare expenditure on patients with diabetes.