The cost-effectiveness analysis of mass screening for Type 2 diabetes mellitus (DM) was performed to elucidate whether, who and how often it should be conducted in Taiwan. A series of Markov process was developed to model the disease natural history of Type 2 DM. A hypothetical cohort with 30,000 residents aged over 30 years in Taiwan was randomly assigned to three arms of screening regimes, biennial, five-yearly and the control group. A Monte Carlo computer simulation was performed to calculate effectiveness of two screening regimes compared with the control group. Direct costs and utilities were incorporated to each corresponding state to calculate the incremental costs per life-years gained and per quality-adjusted life-years (QALYs) for biennial and five-yearly screening regimes. The incremental costs for biennial screening regime were estimated at $26,750 per life-year gained, and $17,833 per QALY. The corresponding figures for five-yearly screening regime were $10,531 per life-year gained and $17,113 per QALY. The incremental costs per life-year gained and per QALY increase with age, ranging from $17,238 for aged 30-39 years to $54,700 for aged over 70 years and from $9193 to 36,467, respectively. In conclusion, mass screening for Type 2 DM, especially in younger subjects, with 5-year inter-screening interval is cost-effective in Taiwan.