The objective of the study was to determine the impact of irbesartan treatment on life expectancy (LE), costs and progression to end-stage renal disease (ESRD) in hypertensive type 2 diabetes patients. A peer-reviewed and published Markov model was used to simulate progression from microalbuminuria to overt nephropathy, doubling of serum creatinine, ESRD and all-cause mortality in hypertensive patients with type 2 diabetes. Three treatment strategies were evaluated: (i) 'control' regimen of conventional antihypertensive therapy (excluding angiotensin-converting enzyme inhibitors, angiotensin-2-receptor antagonists and dihydropyridine calcium-channel blockers), (ii) 'early irbesartan' 300 mg daily and (iii) 'late irbesartan' 300 mg daily (started when overt nephropathy developed). Transition probabilities determining nephropathy progression were taken from the Irbesartan in Reduction of Microalbuminuria-2 study, Irbesartan in Diabetic Nephropathy Trial and other published sources. Outcomes were projected over 25 years. The mean +/- SD cumulative incidence of ESRD was reduced by 8.8% +/- 0.6 and 12.4% +/- 0.7 in patients treated with early irbesartan compared with late irbesartan and control respectively. Early irbesartan treatment improved undiscounted LE by 1.38 +/- 0.08 years (discounted: 0.81 +/- 0.04 years) compared with late irbesartan and 1.41 +/- 0.08 years (discounted: 0.83 +/- 0.04 years) compared with control. Early irbesartan treatment was projected to save (mean +/- SD) pounds 2310 +/- 327 and pounds 3801 +/- 327 over patient lifetimes compared with late irbesartan and control respectively. Irbesartan treatment is predicted to improve survival and reduce costs in hypertensive patients with type 2 diabetes and microalbuminuria compared with 'control'. Early irbesartan treatment is more effective than late irbesartan. Irbesartan is a valuable treatment option in this patient group in a UK setting.