OBJECTIVES This study attempted to evaluate clinical outcomes and long-term cost-effectiveness of an intervention involving Community Health Workers (CHW's, a.k.a. promotoras de salud in Spanish) in assisting Mexican-American diabetes type-2 patients with controlling their condition. The intervention has been carried out in Hidalgo County, TX which is situated on the U.S.-Mexico border. STUDY DESIGN The design of the study is experimental. The sample (n = 30) was recruited from Mexican-American diabetes patients aged 30 or above. The intervention group received monthly visits from CHW's, while the control group did not. METHODS Incremental lifetime health outcomes and related expenditures were calculated using the CDC Diabetes Cost-Effectiveness Model (DCEM) which is a probabilistic computer simulation model of disease progression and cost-effectiveness for type 2 diabetes patients. The DCEM allows projection of lifetime healthcare costs and Quality-Adjusted Life-Years (QALYs). RESULTS The intervention group showed a significant improvement in glycemic control and cholesterol management after two years of intervention. The intervention is expected to reduce long-term complications, resulting in an increase in residual life-years and quality-adjusted life-years. The incremental cost-effectiveness ratio has been estimated to be $13,810, which is below the level of comparable studies. CONCLUSIONS Intervention has a substantial impact on the medical costs of type 2 diabetes treatment. The estimates presented in this model may be used to analyse the cost-effectiveness of interventions involving CHW's for type 2 diabetes.