This study sought to determine 1) the incidence and costs of new onset diabetes mellitus (NODM) associated with maintenance immunosuppression regimens following renal transplantation and 2) whether the mode of dialysis pretransplant or the type of calcineurin inhibition used for maintenance immunosuppression affected either the incidence or cost of NODM. The study examined the United States Renal Data System's clinical and financial records from 1994 to 1998 of all adult, first, single-organ, renal transplantations in either 1996 or 1997 with adequate financial records. It used the second diagnosis of diabetes in previously nondiabetic patients to identify NODM. While NODM had an incidence of approximately 6% per year among wait-listed dialysis patients, NODM over the first 2 years post-transplant had an incidence of almost 18% and 30% among patients receiving cyclosporine and tacrolimus, respectively. By 2 years post-transplant, Medicare paid an extra $21 500 per newly diabetic patient. We estimated the cost of diabetes attributable to maintenance immunosuppression regimens to be $2025 and $3308 for each tacrolimus patient and $1137 and $1611 for each cyclosporine patient at 1 and 2 years post-transplant, respectively.