Background: As in several other industrialized countries, Germany's statutory health insurance (SHI) is facing rising healthcare costs as well as the challenges caused by a double-aging society. The early detection and prevention of chronic diseases is considered a possible way to reduce the impact of these developments. However, controversy surrounds the costs and effects in terms of medical and financial outcomes of such programmes. Objective: To examine the cost effectiveness of screening for type 2 diabetes mellitus (T2DM) from the perspective of the German SHI. The screening programme was compared with the current status quo (i.e. diagnosis of T2DM in routine clinical care or after the occurrence of the first clinical symptoms). Prevention strategies after diagnosis of pre-diabetes encompassed lifestyle and metformin interventions. Methods: Effects of introducing screening for T2DM were assessed based on a Markov Monte Carlo microsimulation model. In contrast to a cohort model, this approach easily allows for detailed subgroup analysis accounting for the different characteristics of the general German population that would be targeted by the screening programme. Assessed endpoints included quality of life, lifetime costs, age at diabetes diagnosis, and incidence and age at occurrence of diabetes-related complications such as myocardial infarction, stroke, renal failure and blindness. Results: Screening for T2DM was cost effective in the general population by all commonly applied standards (&U20AC;562.54 per QALY for lifestyle intervention, &U20AC;325.44 per QALY for prevention with metformin [year 2006 values]) and even cost saving in the subgroup diagnosed with pre-diabetes and treated preventively. Occurrence of diabetes-related adverse events was reduced significantly and life expectancy was increased compared with no screening. Conclusions: These results suggest that early detection and disease prevention may be cost effective in the long term. However, additional political measures are necessary to support implementation, as the German SHI is currently lacking the necessary long-term incentives to support preventive screening programmes.