More than 20% of patients in the Veterans Health Administration (VHA) have diabetes; therefore, disseminating "best practices" in outpatient diabetes care is paramount. The authors' goal was to identify such practices and the factors associated with their development. First, a national VHA diabetes registry with 2008 data identified clinical performance based on the percentage of patients with an A1c >9%. Facilities (n = 140) and community-based outpatient clinics (n = 582) were included and stratified into high, mid, and low performers. Semistructured telephone interviews (31) and site visits (5) were conducted. Low performers cited lack of teamwork between physicians and nurses and inadequate time to prepare. Better performing sites reported supportive clinical teams sharing work, time for non-face-to-face care, and innovative practices to address local needs. A knowledge management model informed our process. Notable differences between performance levels exist. "Best practices" will be disseminated across the VHA as the VHA Patient-Centered Medical Home model is implemented.