Background. Several interventions can be applied to prevent complications of type 2 diabetes. This article examines the optimal allocation of resources across 4 interventions to treat patients newly diagnosed with type 2 diabetes. The interventions are intensive glycemic control, intensified hypertension control, cholesterol reduction, and smoking cessation.,Methods. A linear programming model was designed to select sets of interventions to maximize quality-adjusted life years (QALYs), subject to varied budget and equity constraints. Results. For no additional cost, approximately 211,000 QALYs can be gained over the lifetimes of all persons newly diagnosed with diabetes by implementing interventions rather than standard care. With increased availability of funds, additional health benefits can be gained but with diminishing marginal returns. The impact of equity constraints is extensive compared to the solution with the some intervention costs and no equity constraint. Under the conditions modeled, intensified hypertension control and smoking cessation interventions were provided most often, and intensive glycemic control and cholesterol reduction interventions were provided less often. Conclusions. A resource allocation model identifies trade-offs involved when imposing budget and equity constraints on care for individuals with newly diagnosed diabetes.