The main objective of this randomised study was to compare glycaemic control (as determined by HbAlc levels) in two groups of insulin-requiring Type 2 diabetic patients three months after initiation of insulin therapy either on an inpatient (group A, n = 58) or outpatient (group B, n = 56) basis. Evaluation of the safety and cost of both methods was a secondary objective. Although HbAlc level at inclusion was slightly but significantly lower in group A than group B (10.17 +/- 0.19% vs. 10.87 +/- 0.22% respectively, P = 0.019), covariance analysis showed equivalent glycaemic control at 3 months in both groups (adjusted means with respect to inclusion values: 9.00 +/- 1.14% vs. 9.37 +/- 1.14% respectively; equivalence hypothesis: P = 0.01). A low and similar incidence of episodes of hypoglycaemia and hyperglycaemia with ketonuria was observed. Clinical tests, paramedical care and the cost of hospitalisation itself resulted in a direct cost of initiating treatment that was more than four times higher in group A than in group B (mean total cost per patient: FF 15,231 and FF 3,296 respectively). Insulin-requiring Type 2 diabetic patients can be efficiently and safely started on insulin as outpatients, and this approach to initiating insulin therapy is cost-effective.