With incidence rates for diabetes increasing rapidly worldwide, estimates of the magnitude of the impact on population health are required. We aimed to estimate the lifetime risk of diabetes, the number of years lived free of, and the number of years lived with diabetes for the Australian adult population from the year 2000, and to project prevalence of diabetes to the year 2025.Multi-state life-tables were constructed to simulate the progress of a cohort of 25-year-old Australians. National mortality rates were combined with incidence rates of diabetes and the RR of mortality in people with diabetes derived from the Australian Diabetes, Obesity and Lifestyle study (a national, population-based study of 11,247 adults aged >or=25 years).If the rates of mortality and diabetes incidence observed over the period 2000-2005 continue, 38.0% (95% uncertainty interval 36.6-38.9) of 25-year-olds would be expected to develop diabetes at some time throughout their life. On average, a 25-year-old Australian will live a further 56 years, 48 of these free of diabetes. On average, a 45-year-old person with diabetes can expect to live 6 years less than a person free of diabetes. The prevalence of diabetes is projected to rise from 7.6% in 2000 to 11.4% by 2025.If we maintain current diabetes incidence rates, more than a third of individuals will develop diabetes within their lifetime and in Australia there will an additional 1 million cases of diabetes by the year 2025.