Objectives: Assess impact of community health workers (CHWs) on healthcare utilization of African-American Medicaid patients with diabetes mellitus (DM) with/without hypertension (HTN). Design: Maryland Medicaid claim ®les were analyzed to compare utilization of emergency rooms, hospitalization, and costs in a population managed by CHWs (N5117). Setting/patients: Patients were recruited from the discharge rolls of the University of Maryland Medical System (UMMS) and/or the Maryland Diabetes Care Program from March 1992 to June 1994. Intervention: CHWs alternated weekly home visits and phone contacts to teach patients to understand the need to control their illnesses, to follow both their therapy and behavioral regimens, and to maintain appropriate visits to a primary care practitioner. Results: Total emergency room (ER) visits declined by 40%; ER admissions to hospitals declined by 33%, as did total hospital admissions; and Medicaid reimbursements declined by 27%. Conclusions: The CHW program resulted in an average savings of $2,245 per patient per year, and a total savings of $262,080 for 117 patients, with improved quality of life (QOL) indicating cost effectiveness. (Ethn Dis. 2003;13:22±27) Key Words: Community Health Worker, Healthcare Utilization, Case Management