Meeting the needs of patients with chronic illness in usual primary care practice is difficult. Group Health Cooperative of Puget Sound (GHC), an HMO serving about 400,000 people in western Washington state, is using the strategy of population-based management of care to improve care and outcomes for its 13,000 diabetic patients. Population-based care uses guidelines, and epidemiologic data and techniques to plan, organize, deliver and monitor care to specific clinical sub-populations such as diabetics. Under this approach, guidelines for care and the outcomes effected by those guidelines are defined. Current practice is reviewed, problems are identified, and a new intervention plan devised and put into place. Performance and outcomes are monitored and the plan revised accordingly. Population-based care must occur both centrally to provide guidelines, data, new interventions and other system support, but more importantly at the level of the individual medical practice if it is to reach all patients in the population. In this paper, we describe both central and practice-based efforts at GHC to apply population-based care to improving outcomes for diabetic patients.