An outpatient stabilization programme for diabetic patients was established to overcome the disadvantages of inpatient treatment. The day to day management of patients was carried out by experienced nurse/educators under the supervision of physicians. The telephone was used extensively for communication between the patients and staff of the Diabetes Centre. In a 12 month period, 73 patients were commenced on insulin and 83 patients (62 on insulin) had their diabetic control re-stabilized. In both groups of patients there was a significant fall in glycosylated haemoglobin levels indicating improved metabolic control. Results were similar to those for patients admitted to hospital for stabilization. There are important social and economic benefits from the avoidance of repeated hospitalization.