OBJECTIVE To conduct a systematic literature review of cost-of-illness studies and economic evaluations for diabetic patients with comorbid depression. METHODS Systematic literature search in PubMed and NHS EED in March 2011, complemented by a bibliographic search within all eligible articles. RESULTS The search produced a total of 388 studies of which 16 were analysed in full text. Altogether, eleven studies were included into the review, all of which were conducted in the USA. The results from cost-of-illness studies (n = 8) indicate excess costs in between 35 % and 300 % for diabetics with comorbid depression, in comparison to those without depression. Three economic evaluations indicate that appropriate interventions can lead to improved health (i. e. more depression free days) at no extra cost. The results from two cost-effectiveness analyses indicate dominance (more depression free days and cost-savings compared to "usual care") for the evaluated interventions. CONCLUSIONS Depressive symptoms are associated with increased health care costs in diabetic patients. Part of these excess costs can be attributed to the treatment of diabetes. Appropriate interventions aimed at depression treatment can increase time free of depression at no greater cost than usual care.