Aims/hypothesis: The aim of this study was to estimate the long-term health and economic consequences of improved risk factor control in German adults with type 2 diabetes. Methods: We used the UK Prospective Diabetes Study Outcomes Model 2 to project the patient-level health outcomes and healthcare costs of people with type 2 diabetes in Germany over 5, 10 and 30 years. We parameterised the model using the best available data on population characteristics, healthcare costs and health-related quality of life from German studies. The modelled scenarios were: (1) a permanent reduction of HbA1c by 5.5 mmol/mol (0.5%), of systolic BP (SBP) by 10 mmHg, or of LDL-cholesterol by 0.26 mmol/l in all patients, and (2) achievement of guideline care recommendations for HbA1c (≤53 mmol/mol [7%]), SBP (≤140 mmHg) or LDL-cholesterol (≤2.6 mmol/l) in patients who do not meet the recommendations. We calculated nationwide estimates using age- and sex-specific quality-adjusted life year (QALY) and cost estimates, type 2 diabetes prevalence and population size. Results: Over 10 years, a permanent reduction of HbA1c by 5.5 mmol/mol (0.5%), SBP by 10 mmHg or LDL-cholesterol by 0.26 mmol/l led to per-person savings in healthcare expenditures of €121, €238 and €34, and 0.01, 0.02 and 0.015 QALYs gained, respectively. Achieving guideline care recommendations for HbA1c, SBP or LDL-cholesterol could reduce healthcare expenditure by €451, €507 and €327 and gained 0.03, 0.05 and 0.06 additional QALYs in individuals who did not meet the recommendations. Nationally, achieving guideline care recommendations for HbA1c, SBP and LDL-cholesterol could reduce healthcare costs by over €1.9 billion. Conclusions/interpretation: Sustained improvements in HbA1c, SBP and LDL-cholesterol control among diabetes patients in Germany can lead to substantial health benefits and reduce healthcare expenditures. Graphical Abstract: [Figure not available: see fulltext.].