OBJECTIVE—This study provides nationally representative estimates for the U.S. of medical expenditures associated with diabetes by years since initial diagnosis. RESEARCH DESIGN AND METHODS—Expenditures are estimated using cross-sectional regression analysis on the 2000–2004 Medical Expenditure Panel Survey linked to the 1998–2003 National Health Interview Survey (n = 46,203). The primary variables of interest are an indicator for self-reported diabetes and the years since diabetes diagnosis. RESULTS—Under the base specification, a 50-year-old person just diagnosed with diabetes has medical expenditures that are 4,174 USD higher than an identical person without diabetes. On average, each additional year with diabetes increases annual medical expenditures by $158 (standard error = $38) above and beyond increases in medical expenditures due to aging. Conditional on diabetes complications, each additional year with diabetes increases annual medical expenditures by $75 (standard error = $55). Diabetes increases medical expenditures at any age, and the cumulative effect grows over time. CONCLUSIONS—The results show the expected trajectory of medical expenditures after diagnosis of diabetes, highlighting the benefits of prevention and control as well as informing cost-effectiveness models of diabetes interventions.