BACKGROUND: Intensive treatment (IT) of cardiovascular risk factors can halve mortality among people with established type 2 diabetes but the effects of treatment earlier in the disease trajectory are uncertain. OBJECTIVE: To quantify the cost-effectiveness of intensive multifactorial treatment of screen-detected diabetes. DESIGN: Pragmatic, multicentre, cluster-randomised, parallel-group trial. SETTING: Three hundred and forty-three general practices in Denmark, the Netherlands, and Cambridge and Leicester, UK. PARTICIPANTS: Individuals aged 40-69 years with screen-detected diabetes. INTERVENTIONS: Screening plus routine care (RC) according to national guidelines or IT comprising screening and promotion of target-driven intensive management (medication and promotion of healthy lifestyles) of hyperglycaemia, blood pressure and cholesterol. MAIN OUTCOME MEASURES: The primary end point was a composite of first cardiovascular event (cardiovascular mortality/morbidity, revascularisation and non-traumatic amputation) during a mean [standard deviation (SD)] follow-up of 5.3 (1.6) years. Secondary end points were (1) all-cause mortality; (2) microvascular outcomes (kidney function, retinopathy and peripheral neuropathy); and (3) patient-reported outcomes (health status, well-being, quality of life, treatment satisfaction). Economic analyses estimated mean costs (UK 2009/10 prices) and quality-adjusted life-years from an NHS perspective. We extrapolated data to 30 years using the UK Prospective Diabetes Study outcomes model [version 1.3; (©) Isis Innovation Ltd 2010; see www.dtu.ox.ac.uk/outcomesmodel (accessed 27 January 2016)]. RESULTS: We included 3055 (RC, n = 1377; IT, n = 1678) of the 3057 recruited patients [mean (SD) age 60.3 (6.9) years] in intention-to-treat analyses. Prescription of glucose-lowering, antihypertensive and lipid-lowering medication increased in both groups, more so in the IT group than in the RC group. There were clinically important improvements in cardiovascular risk factors in both study groups. Modest but statistically significant differences between groups in reduction in glycated haemoglobin (HbA1c) levels, blood pressure and cholesterol favoured the IT group. The incidence of first cardiovascular event [IT 7.2%, 13.5 per 1000 person-years; RC 8.5%, 15.9 per 1000 person-years; hazard ratio 0.83, 95% confidence interval (CI) 0.65 to 1.05] and all-cause mortality (IT 6.2%, 11.6 per 1000 person-years; RC 6.7%, 12.5 per 1000 person-years; hazard ratio 0.91, 95% CI 0.69 to 1.21) did not differ between groups. At 5 years, albuminuria was present in 22.7% and 24.4% of participants in the IT and RC groups, respectively [odds ratio (OR) 0.87, 95% CI 0.72 to 1.07), retinopathy in 10.2% and 12.1%, respectively (OR 0.84, 95% CI 0.64 to 1.10), and neuropathy in 4.9% and 5.9% (OR 0.95, 95% CI 0.68 to 1.34), respectively. The estimated glomerular filtration rate increased between baseline and follow-up in both groups (IT 4.31 ml/minute; RC 6.44 ml/minute). Health status, well-being, diabetes-specific quality of life and treatment satisfaction did not differ between the groups. The intervention cost £981 per patient and was not cost-effective at costs ≥ £631 per patient. CONCLUSIONS: Compared with RC, IT was associated with modest increases in prescribed treatment, reduced levels of risk factors and non-significant reductions in cardiovascular events, microvascular complications and death over 5 years. IT did not adversely affect patient-reported outcomes. IT was not cost-effective but might be if delivered at a reduced cost. The lower than expected event rate, heterogeneity of intervention delivery between centres and improvements in general practice diabetes care limited the achievable differences in treatment between groups. Further follow-up to assess the legacy effects of early IT is warranted. TRIAL REGISTRATION: ClinicalTrials.gov NCT00237549. FUNDING DETAILS: This project was funded by the NIHR Health Technology Assessment programme and will be published in full in Health Technology Assessment; Vol. 20, No. 64. See the NIHR Journals Library website for further project information.