INTRODUCTION: Diabetes is an increasing problem among old people as well as being a contributing factor in their need for institutional care. Comorbidity and use of medication is often greater among people with than without diabetes. The aim of this study was to investigate the prevalence of diabetes in Icelandic nursing homes over the period 2003-2012. Additionally we compared health, functioning, medication use and medical diagnoses of residents with diabetes to those without diabetes, living in nursing homes in 2012. MATERIAL: Retrospective study of 16.169 Minimum Data Set 2.0 assessments, further analysis conducted for data from the year 2012 (n=2337). RESULTS: Mean age from 82.3 (SD 9.1) to 85.0 years (SD 8.4) and women were 65.5% to 68.0%. Number of residents with diabetes increased from 10.3% in the year 2003 to 14.2% in 2012 (p≤0,001). Mean age of residents with diabetes in the year 2012 was 82.7 compared to 85 years for others. Residents with diabetes had more skin problems, used more medication, their cognitive performance was better and their involvement in activities greater. They were more likely to have hypertension, arteriosclerotic heart disease, stroke, renal failure, manic depressive disorder, diabetic retinopathy or amputation. They were however, less likely to have an anxiety disorder, Alzheimer's disease or osteoporosis. CONCLUSION: Residents with diabetes are younger than other residents and their cognitive performance is better, their care and treatment may however be complicated and needs to be adapted to each individual. Diabetes is an increasing problem in nursing homes and therefore an area where more knowledge among staff is needed.