Previous studies investigating the relationship between insulin therapy on quality of life (QOL) in Type 2 diabetes have produced conflicting results that may reflect differences in patient samples, study design and context. To assess the effect of insulin on QOL in a community-based, prospective and observational setting, we studied 1290 Type 2 patients recruited from a region of 120,097 people and undergoing detailed annual assessments of metabolic control and complications. The average age of the cohort was 64.1 years, the median duration of diabetes was 4.4 years and 48.9% were males. A modified Diabetes Quality of Life (DQOL) questionnaire and a health measurement questionnaire providing the Rosser index were administered annually. At baseline, the 149 insulin-treated patients had greater satisfaction, worry, impact and total DQOL scores (indicating a worse QOL) than the 1141 non-insulin-treated patients (P< or =0.018). Except in the case of satisfaction, these differences persisted after adjustment for potentially confounding demographic, socioeconomic and diabetes-specific variables (P<0.001). The Rosser index showed a similar pattern, with insulin-treated patients having lower values both before (P=0.012) and after (P<0.001) adjustment. During follow-up, 38 patients commenced insulin but there were no significant differences in DQOL scores or the Rosser index either side of this therapeutic change. In 389 patients on stable therapy and followed for 4 years, DQOL remained significantly higher in insulin-treated patients (P< or =0.005). These findings suggest that, although positive factors including increased support and improved hyperglycaemic symptoms may initially offset unfavourable aspects of insulin self-administration, their effect wanes and a lower QOL supervenes after 1-2 years.