This study explores whether continuity of care is associated with health care outcomes and medical care use among patients with newly diagnosed diabetes. A retrospective cohort analysis was performed using the Taiwanese National Health Insurance database, and cases were followed up from January 2010 to December 2012. Four thousand and seven patients with newly diagnosed diabetes were followed for 3 years. The continuity of care was measured using the continuity of care index (COCI) and the usual provider continuity score (UPCS) with high and low dichotomous categories. The probabilities of dementia, hospitalization, emergency room visits, and death were used as health care outcomes. Medical care use was defined as the number of hospital admissions, length of hospital stays, and number of emergency room visits. Adjusted odds ratios (ORs) were obtained using multivariate logistic regression; adjusted ORs for the probabilities of dementia, hospital admissions, and emergency room visits in the higher COCI patient group were 0.582 (p < 0.05), 0.623 (p < 0.001), and 0.650 (p < 0.001), respectively. Negative binomial regression models for medical resource use indicated that the group with higher COCI scores used fewer medical resources compared with the group with lower COCI scores. The findings of UPCS analysis showed that those in the high COCI group also fell into the high UPCS group. In this study, continuity of care was associated with favorable health care outcomes and less medical care uses among newly diagnosed diabetic patients. Long-term relationships between patients and health care providers should be enhanced to provide improved continuity of care.