Using data from a retrospective cohort study of Medicare beneficiaries hospitalized with an acute myocardial infarction (AMI), we evaluated the role of diabetes mellitus on 30-day and 1-year mortality. We classified subjects as nondiabetics, diabetics controlled with diet alone, diabetics receiving an oral hypoglycemic agent, and diabetics on insulin at time of admission. We compared baseline admission characteristics of subgroups using chi-square and Wilcoxon rank-sum tests and evaluated the effect of each diabetic state using sequential logistic models. We identified 80,832 nondiabetic patients, 9,862 diet-controlled diabetic patients, 14,664 diabetics receiving an oral hypoglycemic agent, and 12,241 diabetic patients on insulin therapy. Although mean age was similar among the groups, prevalence of hypertension, prior AMI, prior congestive heart failure, and prior revascularization were higher among diabetic patients, particularly those taking insulin. Diabetic patients, particularly those taking insulin, were less likely to receive aspirin and beta blockers and to undergo coronary revascularization. Diabetic patients had higher 30-day and 1-year mortality than nondiabetic patients. After adjustment for demographics, clinical and hospital characteristics, and treatment strategies, insulin-treated diabetics had the highest risk of mortality, followed by diabetics receiving oral hypoglycemic agents, followed by diet-controlled diabetics. Thus, diabetes is highly prevalent among elderly patients with an AMI. Mortality rates for these patients, particularly insulin-using diabetics, are higher than among their nondiabetic counterparts. Preventive and therapeutic strategies must be developed to ensure improved short- and long-term outcomes for elderly patients with diabetes and AMI.